‘Caged-up’ consumers to unleash demand on beauty, travel and retail
Stockbrokers Wilsons Advisory has told investors to watch out for the “caged up consumer” as lockdown restrictions ease in southern states and pent-up demand is released on retailers.
While Covid is dispersing into an epidemic, it continues to cost the Australian economy billions. (Image: ABC)
In a report, Wilsons said there was a prospect of a sharp rebound in activity levels for many service-based industries as the southern states emerge from the hibernation of COVID-19 lockdowns.
The re-opening was likely to herald a rush to companies like Silk Laser.
“The underlying drivers are predominantly around women wanting to look and feel great about themselves,” Wilsons said.
“The re-opening theme is likely to dominate investor interest into the end of 2021.
“We think investors should be positioned for the reopening theme. Our preference is to be exposed to the domestic service sectors where we have greater confidence around both the timing and the level of pent-up demand.”
It said the companies with the greatest rebound potential were travel services, healthcare, office trusts, shopping mall trusts and engineering services.
“The majority of these stocks have underperformed the S&P ASX 300 year-to-date,” the report said.
Within those sectors were underperforming companies that were heavily impacted including Flight Centre (travel), Pacific Smiles (healthcare), Star Entertainment (gambling/entertainment), Corporate Travel Management (travel) and Qantas (travel).
Wilsons said travel stocks were already starting to show better performances, but there was still a high degree of uncertainty about international travel re-opening and that was detrimental to Flight Centre and the casinos like Star Entertainment.
