Best & Worst Performing Stocks In Coronavirus Outbreak

The coronavirus outbreak and its subsequent impact on corporate profit margins and the global economy continue to dominate the headlines. U.S. stocks endured their worst weekly slide on Feb 28 since October 2008. In fact, all the major indexes closed in the correction territory last Thursday, and several well-known companies like Nike (NYSE:NKE), United Airlines and Mastercard (NYSE:MA) issued earnings and revenue warnings.

Goldman Sachs’ chief global equity strategist, Peter Oppenheimer, added that “in the nearer term…we believe the greater risk is that the impact of the coronavirus on earnings may well be underestimated in current stock prices, suggesting that the risks of a correction are high.”

But U.S. stocks did make a roaring comeback on Mar 2 after investors started to believe that central banks around the world, including the Fed, would take actions to put a check on the steep losses. Most of them are widely expecting a coordinated global effort to trim rates to stimulate the economy.

Australian central bank’s governor in the meantime acknowledged that the coronavirus outbreak does have a “significant effect” on the country’s economy and any move to ease monetary policy will certainly “provide additional support to employment and economic activity.”

However, let’s admit we can not completely write off the adverse impact of the outbreak, and the U.S. stock market will continue to gyrate in the days to come. After all, the disease continues to spread. The virus has reached countries beyond China, including the United States, Italy, Germany, Iran and South Korea.

Nonetheless, these stocks are the big winners and losers since the coronavirus outbreak stalled the U.S. bull market —

Stocks That Defied the Coronavirus Pandemic

Co-Diagnostics, Inc. (NASDAQ:CODX) , Moderna, Inc. (NASDAQ:MRNA) , Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) and Netflix, Inc. (NASDAQ:NFLX) are some of the prominent names that have soared 1889.5%, 33%, 23.8% and 17.8%, respectively, so far this year amid the coronavirus rout. Take a look —

Molecular diagnostics company Co-Diagnostics has introduced an easier-to-use molecular diagnostic test known as the Logix Smart Coronavirus COVID-19 test. And the company has received a CE mark approval from the European Union to make this test commercially available.

With the outbreak spreading rapidly, the need for molecular diagnostic tests will increase, and in turn, boost Co-Diagnostics’ revenues. The company currently has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has moved up 66.7% over the past 60 days. What’s more, the company’s expected earnings growth rate for the next quarter is 44.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Clinical stage biotechnology company, Moderna has manufactured a new vaccine for coronavirus treatment. Unlike DNA-based treatments, Moderna focuses on developing mRNA treatments, which should help in treating the virus better. DNA-based treatments generally require the nucleus of the cell but mRNA can be found across the cell which makes it easily accessible.

Moderna, by the way, has been pretty impressive. After getting to know the virus’ genetic composition, it took the company less than two months to develop the vaccine. Moderna currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 6.2% over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 7.5% and 9.8%, respectively.

Based on Ebola knowledge, Regeneron Pharmaceuticals is making a vaccine to tackle COVID-19. Regeneron’s initiative to prepare such a potent weapon helped its shares increase leaps and bounds this year especially when compared to the mere 2.5% it brought in for the last 12 months. By the way, the company is doing well in itself. Its fourth-quarter results were impressive, wherein both sales and earnings beat estimates on label expansion of Eylea and Dupixent.

Regeneron currently possesses a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 6.4% over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 35.5% and 15.1%, respectively.

Apart from biotech stocks, Netflix’s shares have gained because the company has an established business models and is fundamentally strong enough to provide hedge against any downfall. Firstly, it primarily provides streaming services, so any lockdown in response to the coronavirus outbreak won’t have any impact on its subscriber growth. In fact, Netflix added 8.8 million subscribers internationally last quarter, surpassing analysts’ expectations by more than a million.

Netflix’s subscriber growth was mostly driven by content strength, focus on originals across various genres and languages, rapid international expansion and partnerships with telcos. Meanwhile, Netflix entered this year’s Oscars with 24 nominations, and walked away with two wins. Such wins will certainly help Netflix lure and retain subscribers in the face of challenges from rival services like Disney+ and Apple (NASDAQ:AAPL) TV+.

Netflix currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 10.6% north over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is a promising 119.7% and 46.7%, respectively (read more: Coronavirus Fears Holding You Back? 3 Smart Ways to Invest).

Not So Lucky Ones

With so many people affected across the globe by the spread of the contagious disease, travel-related stocks were hit hard. Cruise operators were among the worst hit. Shares of Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) have tanked 39.1% on a year-to-date basis. After all, the company has generated 2% of its revenues from China over the last 12 months. Airline stocks were also collectively affected, and most prominently American Airlines Group Inc.’s (NASDAQ:AAL) shares have slipped 34.2% so far this year.

Coming back to revenue exposure, energy giant Chevron Corporation (NYSE:CVX) have seen its shares slide 19.8% so far this year. This is because Chevron’s revenue exposure to China is about 27%. The Boeing Company (NYSE:BA) also took a beating. Boeing’s shares fell 11.3% on a year-to-date basis, as the manufacturer of commercial jetliner has a slightly more than 13% revenue exposure to China, according to FactSet.

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