The COVID-19 pandemic has pushed share prices on some stocks much higher so far in 2020, while others have been hammered by the impact the pandemic has had on consumers. In fact, consumers trying to avoid the coronavirus almost certainly have been responsible for the biggest moves in share prices this year.
On the plus side, FedEx (up nearly 95% to date in 2020), Amazon (up more than 75%), UPS (up about 53%), Target (up more than 36%) and Walmart (up almost 25%) have benefited from consumers ordering more online and having it delivered.
Conversely, the industries hit hardest by the pandemic have been cruise lines and oil and gas. Airlines, which also have been hit hard by lack of travelers, were cushioned from some of the pandemic’s effects by some $17 billion in federal aid. Another hard-hit sector has been real estate, especially commercial real estate.
Of the 20 S&P 500 companies hit hardest by the pandemic, 12 are energy-related, three are cruise line operators, two are real estate investment trusts (Vornado and Simon), two are airlines (United and American) and one a bank (Wells Fargo) and one IT company (DXC Technology).
On Wednesday we had a look at the year’s biggest loser, Carnival Corp. & PLC (NYSE: CCL), which has traded down nearly 60% for the year to date. The outlook for next year is dimmed by no-sail orders and continuing cash burns that are running around $530 million per month at Carnival.
Here’s a look at the other four big losers so far in 2020.
Norwegian Cruise Line Holdings Ltd. (NASDAQ: NCLH) is the second-worst performing S&P 500 stock for 2020. Shares have dropped about 56% since January, after recovering from a plunge of more than 85% in mid-March. Everything we said about Carnival also applies to Norwegian except the company’s cash burn rate is $175 million a month. While sharply lower than Carnival’s burn rate, Norwegian’s cash burn is the highest among the three large cruise operators on a per ship basis.
24/7 Wall St.Norwegian’s stock has traded between $25.50 and $27.50 in the past week and it has a 52-week range of $7.03 to $59.68. The $22.31 consensus price target indicates that investors’ hopes may have outrun reality.
TechnipFMC PLC (NYSE: FTI) provides both offshore and land-based services to oil and gas producers. The stock has dropped about 54% since January. Two other services firms (National Oilwell Varco and Schlumberger) have lost more than 43% each for 2020 to date and join Technip among the 10 biggest losers of the year so far.
Technip shares have been trading around $10, in a 52-week range of $4.49 to $21.84. With a price target of $11.35, the recent share price implies a potential upside of around 14%. Technip pays a dividend yield of 1.31%.
Occidental Petroleum Corp. (NYSE: OXY) is the worst-performing independent oil and gas exploration and production company for the year to date. Oxy’s shares have dropped nearly 53% so far this year. In May of last year, Oxy acquired peer Anadarko for $38 billion, and the stock’s share price has been sliding ever since. Faltering demand for oil as a result of the COVID-19 pandemic made the decline worse, and the stock price has more than doubled since late October as investors expect the pandemic’s spread to slow now that vaccines are becoming available.
Oxy recently has traded around $19.50 a share, compared with a consensus price target of $15.75. The stock’s 52-week range is $8.52 to $47.58, and Oxy’s dividend yield is 0.21%.
HollyFrontier Corp. (NYSE: HFC) is an independent refining and marketing company with the capacity to refine nearly 500,000 barrels of oil a day at its five refineries. Year to date, the shares are down 50%, and that includes a gain of nearly 15% so far in the fourth quarter. While low crude prices typically mean higher refining margins, that’s only true if demand doesn’t crater at the same time. HollyFrontier’s gross margin is 17.4%, but both operating and profit margins are negative.
HollyFrontier has been trading right around $26 a share, in a 52-week range of $16.81 to $51.97. The consensus price target on the stock is $29.60, implying a potential upside of around 14%. The refiner also pays a dividend yield of 5.3%.
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