These 2 Top Recovery-Play Stocks Soared Thursday

The stock market finished the holiday-shortened week on a strong note on Thursday, as the S&P 500 (^GSPC -0.22%) achieved new record highs above the 4,000 mark. The Dow Jones Industrial Average (^DJI 0.06%) finished just shy of its own all-time record, while the Nasdaq Composite (^IXIC -0.52%) 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.

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 -0.89%) 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 -0.02%) 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.

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.