President Donald Trump said on Thursday he will announce details of his tax plan in the next two to three weeks. Wall Street strategists and company analysts have already been hard at work giving clients ways to play this big moment for the markets.
Just a few weeks ago Goldman Sachs strategist David Kostin shared a basket of stocks with the highest effective tax rates that he believes will benefit the most from the lowering of the corporate tax rate. Here are seven stocks the firm recommended in its “high tax rate” basket.
In similar fashion, JPMorgan agreed with the same thesis of buying companies with high tax rates.
“Companies with high effective tax rates and high domestic revenue exposure will disproportionately benefit from a reduction in tax rates,” U.S. equity strategist Dubravko Lakos-Bujas wrote in a note to clients.
Here are 10 names the JPMorgan strategist highlighted with the highest tax rates.
Strategas Research Partners focused on a different area of tax policy. The firm told clients to buy stocks that will benefit from his likely plan to allow multinationals to bring foreign profits back into the country at a reduced tax rate.
“We have been surprised that our repatriation basket has not outperformed post-election since this tax change has the highest probability of being enacted,” Dan Clifton wrote.
For investors who want to trade the repatriation tax holiday being implemented, here are five companies in the firm’s repatriation basket.
“Disney has a pro-inflation business model (advertising, theme park & resort pricing), is largely domestic, is a full taxpayer, has low leverage, and has relatively high capital expenditure levels,” Jayant wrote in a note to clients. “Broadly speaking, in considering the primary insinuations put forth by Congressman Ryan’s tax reform blueprint … Disney stands to be a significant beneficiary.”
“Since the election, we have become more optimistic on the prospects for tax reform and have been able to better understand the potential benefits for Verizon. We also believe Verizon is likely to see a lighter touch from regulation,” analyst Rollins wrote.
“Our analysis shows that historical changes in tax rates (both personal and corporate) have been catalysts for billed business growth (and GDP growth),” analyst Sanjay Sakhrani wrote.