With the November election fast approaching, a team of analysts identified several stocks and sectors that could thrive if Democrats win big this fall.
Based on a survey of its analysts, RBC Capital Markets wrote in a report that a Democratic win of the White House and Senate would be bullish for utilities stocks, "slightly bearish" for technology, and neutral for REITs, communication services and consumer staples.
Looking at potential legislative outcomes and other policy drivers, in addition to the factors that typically drive stock ratings, the analysts identified a few specific likely winners if Democrats sweep the November elections.
In telecommunications, RBC picked Charter Communications (CHTR) as a likely beneficiary of a Democratic administration and majorities, writing that it could benefit from expansion into rural areas, and corresponding revenue growth. Charter Communications has expressed interest in the Rural Digital Opportunity Fund, an initiative to close the digital divide that could advance more quickly in a Biden presidency.
Perhaps ironically, Fox Corp. (FOXA) could get a boost in a Democratic sweep, according to RBC, although it believes media stocks are mostly insulated from the impacts of the election. Fox may be in a strong position if M&A is scrutinized more heavily, given that merger potential is embedded into the prices of competitors such as Discovery Communications (DISCA) .
"While we acknowledge that a Trump reelection could bode well for FOX News, we note that the conservative news network’s share advantage over peers CNN and MSNBC had remained largely resilient under the Obama administration," the analysts noted.
Among internet stocks, RBC identified Uber (UBER) and Stitch Fix (SFIX) as likely winners no matter the outcome of the election. Analysts noted that a Biden presidency would be largely neutral to internet stocks overall, but the bank likes Uber's leading competitive position at the intersection of tech and transportation and delivery momentum. Stitch Fix, meanwhile is in a good position given a challenging brick-and-mortar-retail environment, according to RBC.
One mega-cap stock that could find a friendly environment if Democrats take power: Tesla (TSLA) .
Sentiment for electric vehicles is already riding high, with Tesla -- which RBC called the "poster child" of battery-powered electric vehicles -- more than tripling in value year to date. Bullishness around electric vehicles would likely continue in a Democratic administration, the bank wrote.
Stocks in a strong position no matter who wins, according to RBC? Drugmaker Gilead (GILD) , homebuilding firm Toll Brothers (TOL) , McDonald's (MCD) , UnitedHealth (UNH) , and food conglomerate Constellation Brands (STZ) .