Shares in the electronics retailer jumped 1.3% to $42.80 in morning trade when the S&P/ASX 200 Index (Index:^AXJO) tumbled 1.3%.
Worries about a second wave of coronavirus infections are gripping global markets, but investors should stand ready to back ASX shares that are well placed to benefit from the crisis.
Survey’s surprising results
JP Morgan undertook a survey of 500 consumers to test some of its assumptions about the winners and losers from the pandemic – and some of the results were surprising.
“The COVID-19 pandemic and its lingering aftereffects look all but certain to fundamentally change how we work, consume, travel, interact and socialise,” said the broker.
“These tectonic shifts will have deep and far-reaching implications for a range of sectors and industries, with many likely to endure permanent structural change.”
The respondents to the survey were chosen across age, gender and employment status. This is to ensure they represented Australia’s demographic distribution.
Not so super for Supermarkets
The results throw into doubt JP Morgan’s belief that investors should be underweight on consumer discretionary stocks and neutral on consumer staples during the crisis.
“Consumers expect to shop online for food more post-COVID-19, yet surprisingly intend to also eat out more frequently,” said JP Morgan.
“We had expected a result showing food retail gaining share from cafes and restaurants.”
Malls are down but not out
Another surprise from the survey was consumer attitudes towards shopping malls. The surge in online sales from stuck-at-home consumers is a major risk factor for ASX-listed retail landlords.
“Somewhat surprisingly, only a small [number] of people expect to visit shopping centres less post-COVID-19 than more, with the average visitation also expected to be down only slightly,” added JP Morgan.
“We view this as positive for retail landlords, as we had expected a more dramatic shift given how they are priced.”
I still hold a negative view to the sector as visitations don’t necessarily equate to sales, but JP Morgan’s top pick here is GPT Group (ASX: GPT).
Driving better than flying
Another interesting finding was that nearly half of respondents expected to fly less even after state and international border restrictions are eased.
Further, 68% said they won’t fly internationally until a vaccine is found. This means driving holidays may be entering a renaissance period, and the stocks on the broker’s buy list that are leveraged to this are petrol stations Viva Energy Group Ltd (ASX: VEA) and Ampol Ltd (ASX: ALD).
Finally, the work-from-home culture that’s incubated during the pandemic is likely to continue to be a tailwind for JB Hi-Fi.
Around 45% of respondents intended to increase their spending on technology and JP Morgan is recommending investors buy this stock.
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