Amid a more dangerous economic backdrop, analysts at Macquarie think stocks including Visa Inc., Planet Fitness Inc., Trade Desk Inc., and lotto operator International Game Technology PLC could show “ basic stability. “
Within the payment universe, the Macquarie team deals with Visa V,
at Mastercard Inc. MA,
two stocks that “stay in line through current rising volatility” and have previously shown to be “wonderfully resilient through recessions thanks to their size, change, and structural tailwinds in digital payments.”
The “structural growth” of card networks could help them stand out in the face of any weakness in volumes, analysts continue.
At Mastercard in particular, they like the company’s positioning in cross-border payments, emerging markets, and newer areas such as digital identity and open banking. For Visa, they note that the company has taken “proactive steps” on cryptocurrency that could help close the proportional gap in developing-market exposure to rival Mastercard and Visa’s position to benefit from greater participation. in the economy in weak money markets. “
Within the leisure sector, analysts see promise of a newer name that was not public during the last economic downturn. Planet Fitness PLNT,
can continue to offer an attractive proposition for value for consumers, they reason, by attracting people looking to “trade down” from more expensive gyms, as well as appearing to be “too cheap to cancel” for current members.
“The store unit economy is back to historic levels, and demand at every existing location is accelerating, highlighting the runway ahead for new unit growth,” they wrote. “The company has a lot of domestic and international franchising ahead in our view, and a value proposition to the consumer if macro sentiment worsens ($ 10/month base membership, $ 24.99/month for Black Card members).”
Madison Square Garden Sports Corp. MSGS,
managing the New York Knicks and Rangers, could be another pastime, according to analysts. The company “has substantial contract revenue from sports media rights, and we dispute the legacy of its teams, not to mention the largest market, should drive and hold value through wider market turmoil, ” They said.
Software selections include ServiceNow Inc. NOW,
Atlassian Corp. PLC TEAM,
Instructure Holdings Inc. INST,
at VMware Inc. VMW,
based on the assumption that the “best-of-breed software-as-a-service (‘ SaaS ’) company can provide shareholders with solid cash-flow-generative assets supported by the enterprise’s sticky customer base . “
ServiceNow has a “large global enterprise customer base” that “provides ample cross-sell and up-sell opportunities, which can support growth even in a bad market environment,” while Atlassian has a strong self-service sales model that allows it to limit marketing spending, analysts wrote. True, Atlassian has “somewhat higher exposure to small to medium -sized businesses,” but Macquarie’s team said the company showed at the start of the pandemic that it could withstand events forcing smaller business.
As for Instructure, analysts note that the company provides educational customer service in the higher education and K-12 markets. “We want Instructure’s positioning as the market share leader in the learning management system (‘ LMS ’) market for higher education institutions in the US, which we believe has a strong customer base similar to corporate enterprises,” they wrote. .
VMware has promised that because of the upcoming tailwinds from its transition to the SaaS model (vs. perpetual licensing), sticky customer base, and implicit put options from Broadcom’s recently announced acquisition of AVGO,
”They continued.
Analysts are also betting that consumers will still play the lottery in tough times, noting that the lottery business was “resilient” to the last financial crisis and the start of the pandemic, while businesses operating in This industry has relationships.
“In our view, the lottery industry is a remarkably stable and consistent business, showing consistent growth through the economic cycle,” the analysts wrote, featuring International Game Technology PLC IGT,
at NeoGames SA NGMS,
Gaming companies may also take, calling analysts at Penn National Gaming PENN,
MGM Resorts International MGM,
at Caesars Entertainment Inc. CZR,
as favorite picks.
Additionally, they see potential in ad-technology companies Applovin Corp. APP,
The TTD Trade Desk,
at IronSource Ltd. IS,
cites “their relative stability through targeted marketing, secular growth in mobile and connected TV, and low cost.”
.