Financial and education stocks would benefit if Mitt Romney wins the U.S. presidential election while a second term for Barack Obama would boost companies focused on clean energy, Credit Suisse Group AG said.
Electing the Republican candidate would be a positive for banks because regulatory reforms and supervision would be more “balanced,” Credit Suisse analysts wrote in a note today. Education stocks have dropped following an overhaul in federal student financial aid and may fall further under Obama, whose administration could pursue another round of initiatives that hurt earnings, they said.
“While we do not expect a repeal of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a more ‘balanced’ approach to bank supervision and future bank reforms are likely to be viewed favorably,” a group of analysts led by Mark Flannery, wrote in a note today. “We think a Republican administration would be a positive for bank stocks.”
With less than four weeks until the Nov. 6 election, the race between Romney and Obama has tightened. Polls showed that most voters said Romney won the Oct. 3 presidential debate, helping him narrow the gap among likely voters in five swing state polls, while a report last week showing the lowest unemployment rate since Obama took office in January 2009 may boost the Democrat president.
Financial stocks are up 24 percent in 2012, the most among 10 main S&P 500 industries, while education stocks have plunged 45 percent.
Banks to Watch
Credit Suisse listed Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. as stocks that are “well positioned” if Romney wins, while saying an Obama victory would have a neutral impact on shares of financial firms. Shares of Apollo Group Inc., Bridgepoint Education Inc., DeVry Inc. and Strayer Education Inc. would be boosted from a victory by the Republican candidate and hurt by the Democrat’s re-election.
Clean-technology companies such as Codexis Inc., Cree Inc., Echelon Corp., EnerNOC Inc. and First Solar Inc. would do better under Obama than Romney, the analysts said. An Obama victory would also hurt managed health-care stocks and oil prices could gain if Romney is elected, according to the note.
The S&P 500 has gained 16 percent on average in election years when a Republican wins and an equal amount when the incumbent remains in the White House, according to today’s note.