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Feb. 9, 2021, 4:25 p.m. EST

‘New normal’ grows more likely as vaccine acceptance, stimulus spending increase: Stifel data

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Tonya Garcia

Stifel’s latest spending survey shows consumers are growing increasingly more willing to get a coronavirus vaccination and are spending their stimulus checks, significant factors in a resurgence of activities such as vacation planning and shopping.

Nearly nine out of 10 respondents (87%) with a household income of more than $100,000 have decided to get the coronavirus vaccine. Almost half of respondents (41%) earning less than $50,000 say they will.

Thirteen percent of respondents say they won’t get the vaccine, down from 18% in the previous three surveys.

More than two-thirds of respondents (68%) said they received a check from the latest round of government stimulus efforts, with 76% of those people saying they plan to spend it.

Read: American Airlines warns employees it could furlough thousands by April

Also: American Airlines stock soars after Q4 results but is ‘dislocating with fundamentals,’ analyst says

“Respondents claim to feel most comfortable with flying and indoor dining, our proxy for resuming a new normal, when they and others have been vaccinated,” Stifel analysts led by Mark Astrachan wrote in the survey report.

Fifty-three percent of respondents said they would feel more comfortable flying when they and others have been vaccinated. And 38% said they would be more comfortable eating indoors when vaccinations have been more widely distributed. Vacation planning is already on the rise, with 38% saying in late-January they have booked a trip or plan to.

“We view overall stimulus spending as favorable for most retailers and CPG [consumer packaged goods] companies, and we have seen an overall increase in spending in scanner data across measured categories,” Stifel said.

Restaurants and the travel industry have been hit hard by COVID-19, while other areas such as groceries have done well.

“[S]pending on consumer durable goods has accounted for an above-average share of total consumer spending during the pandemic due to the restrictions placed on other retail categories such as the restaurant industry,” explains a Morning Consult report .

Retailers selling essentials, home goods and other items tied to shoppers COVID-19-impacted lives have done well, along with those providing services that help with social distancing, such as curbside pickup and swift delivery.

Stifel upgraded Target Corp. /zigman2/quotes/207799045/composite TGT +0.93% to buy from hold as use of same-day services like Drive Up have increased. Stifel has a $225 price target on Target shares.

“Target consumers are ~40% more likely to be users of at least one same-day service compared to overall survey respondents,” the Stifel report said.

“This is notable as same-day has increasingly become a driver of Target comp growth, accounting for ~42% of digital sales in 2020, up from 30% in 2019 and 20% in 2018.”

See: Target’s holiday sales show the importance of stores even as COVID-19 drives business online

Target’s most recent earnings showed a 102% increase in comparable digital sales, with 95% of sales for the holiday period filled in stores, when taking into account sales in stores, same-day services and ship-from-store.

/zigman2/quotes/207799045/composite
US : U.S.: NYSE
$ 205.36
+1.90 +0.93%
Volume: 2.90M
April 9, 2021 4:02p
P/E Ratio
23.75
Dividend Yield
1.32%
Market Cap
$102.40 billion
Rev. per Employee
$228,756
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