With Joe Biden officially inaugurated as the 46th president of the United States, investors are now looking at earnings to watch that stand to benefit from the new administration. That’s because a new president brings new priorities and goals, and that can put different sectors in the spotlight — or the doghouse.
Among the biggest beneficiaries to Biden’s time in office are expected to be alternative energy stocks — we’re talking green energy and electric vehicles. He has made environmental concerns a centerpiece of his administration.
Adding to this is the shift from value stocks to growth stocks. Stocks that had a strong run in 2020 look ready to cool down to make room for value sectors like healthcare.
With a new political landscape on the horizon, here’s are four earnings to watch with Biden in office.
- Brookfield Renewable Energy (NYSE:BEP)
- Tesla (NASDAQ:TSLA)
- Workhorse Group (NASDAQ:WKHS)
- Darden Restaurants (NYSE:DRI)
Earnings: Brookfield Renewable Energy (BEP)
One of Biden’s major areas of focus is climate change, making this is a hot sector for investors to watch. As “the number 1 threat facing humanity” the new administration will accelerate the adoption of green energy in the environment. The ultimate goal is to achieve net-zero emissions by 2050, and the government plans to invest $2 trillion in green energy over the next few years to make this a reality.
Biden believes the Green New Deal will serve as a blueprint in tackling climate change.
One company that stands to gain a potential windfall from this is Brookfield Renewable Energy. The renewable-energy company owns a wide portfolio of green assets including wind, solar and hydroelectric.
Brookfield is a major player in the green space and has managed to generate an annual return of 18% over the last twenty years. While the Biden administration will not have a direct impact on BEP, its decisions will help bolster Brookfield’s bottom line.
Keeping in line with the green energy goal, the new administration also plans to push electric vehicles forward. For EV companies like Tesla, this will extend its winning streak into 2020 as well.
Investor optimism in this sector remains high, with many hoping for a complete electric takeover in the next few years. With more emission laws in place, the electric vehicle market is expected to have a market valuation of $567.2 billion by 2026.
Tesla is a valuable company and its shares were up by an impressive 700% in the last year. This means this EV stock is set to thrive regardless of the economic or political environment. However, the administration’s focus on clean energy will certainly bolster its market position.
Some analysts believe that Tesla’s meteoric rally will plateau this year, but the new administration’s zero-emission target will do wonders for its bottom line.
Workhorse Group (WKHS)
Workhorse Group is often overshadowed by its larger counterparts in the EV market, but the company is a major player in the sector. Unlike Tesla, which focuses on consumer cars, WKHS manufactures electric trucks for commercial use, as well as drones. With the rise in e-commerce in the coming years, a thriving delivery business will keep WKHS stock at the top of its game.
Also, the company’s existing partnerships are expected to grow under a Biden administration.
One of the Workhorse’s most lucrative deals may turn out to be with the United States Postal Service (USPS). While the outcome of the deal is still in question, a partnership with the USPS would give Workhorse a definitive edge over its competitors. The potential $6.3 billion overhaul of its delivery fleet coupled with an administration that places a lot of emphasis on green energy would push WKHS stock up.
Darden Restaurants (DRI)
The pandemic served a major blow for the restaurant industry, but things could finally start looking up under the new administration. The economic stimulus bill proposed by the Biden administration includes a $2 trillion Covid package with $1,400 payments to Americans. While much of this will be spent on basic needs, there is also a good chance we see an uptick in restaurant meals.
This will serve as a major boost for companies in this sector, like Darden Restaurants. Darden is the parent company of restaurant chains like Olive Garden, Longhorn Steakhouse and Seasons 52, among others. 2020 was a bad year for these brands, but the company’s earnings could power higher with the rollout of the economic relief bill.
Furthermore, the speedy inoculation of the masses will add to Darden’s post-pandemic recovery.
On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for InvestorPlace since 2020.