Please ensure Javascript is enabled for purposes of website accessibility

These 2 Top Recovery-Play Stocks Soared Thursday

By Dan Caplinger - Updated Apr 1, 2021 at 6:31PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Ridesharing and home-furnishings companies have a good day.

The stock market finished the holiday-shortened week on a strong note on Thursday, as the S&P 500 (^GSPC -0.18%) achieved new record highs above the 4,000 mark. The Dow Jones Industrial Average (^DJI 0.07%) finished just shy of its own all-time record, while the Nasdaq Composite (^IXIC -0.58%) had to be content with the biggest gains on a percentage basis. Investors were generally optimistic about the way the economy is starting to behave and have high hopes for continued momentum as coronavirus vaccinations continue.

Index

Percentage Change

Point Change

Dow

+0.52%

+172

S&P 500

+1.18%

+47

Nasdaq Composite

+1.76%

+233

Data source: Yahoo! Finance.

Recovery-play stocks have been all the rage, and a couple of big players have been hoping to get a boost from an economic recovery. Uber Technologies (UBER -1.72%) has been hamstrung by weak demand for ridesharing given the work-from-home movement and concerns about health, and so it stands to be an obvious beneficiary of reopening efforts. Meanwhile, some might see Wayfair (W -6.11%) as a bigger winner from stay-at-home behavior than from reopening economies, but the furniture e-commerce retailer has solid prospects for growth regardless.

Uber hits the gas

Shares of Uber Technologies rose almost 6% on Thursday. That was enough to put the stock within 10% of its all-time highs and signaled rising confidence about the company's long-term prospects.

Uber earned favorable comments Thursday from Wall Street analysts. Jefferies started coverage on the ride-hailing specialist with a buy rating, setting a price target of $75 per share. Jefferies believes that as vaccines roll out, Uber is in the perfect position to see its growth accelerate. Even though analysts understand that Uber's delivery business will likely see some headwinds as people return to more-normal life, the boost to the mobility segment should be more than enough to offset any weakness elsewhere.

Uber has much larger aspirations. The company wants to be the go-to provider for immediate mobility services, whether it's transporting people or getting vital goods from place to place. To accomplish that, it has made big strides in integrating multiple services into its app to provide maximum flexibility.

Uber has had a tough time since its IPO. But investors seem to think its biggest problems are behind it, and if they're right, the stock has further to climb.

Room with couch, chair, table, and other furnishings.

Image source: Wayfair.

Wayfair looks overseas

Elsewhere, shares of Wayfair finished the day up 7%. The online furniture retailer has seen solid growth during the pandemic, but investors insist that its business won't dry up even once COVID-19 is under control.

A couple of analysts gave favorable comments on Wednesday that praised Wayfair's business model. At Wedbush, analysts kept their rating of outperform and boosted their price target by $15 to $345 per share, citing additional services in logistics, shipping, and advertising that are adding value for suppliers. D.A. Davidson made a bigger boost to $450 from $326 in its price target, with its buy rating hinging on a 15% growth-rate projection for Wayfair's addressable market that could persist through the end of the decade.

Wayfair also has opportunities to expand internationally. At Jefferies, analysts believe that given the performance of similar companies abroad, Wayfair could transplant its business model to other countries, especially in Europe.

Younger shoppers have been extremely pleased with Wayfair's service. That could bolster its growth in an economic recovery and keep the stock moving higher well into the future.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wayfair Inc. Stock Quote
Wayfair Inc.
W
$53.83 (-6.11%) $-3.50
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$32,218.34 (0.07%) $21.68
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,016.47 (-0.18%) $-7.42
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$11,736.73 (-0.58%) $-68.27
Uber Technologies, Inc. Stock Quote
Uber Technologies, Inc.
UBER
$23.97 (-1.72%) $0.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
345%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.