US stocks are recovering some lost ground after President Xi and the Trump Administration agreed to pause mutual tariffs for 90 days.
In the next three months, world leaders will work to reach a more comprehensive and permanent deal.
Goldman Sachs says that a number of US firms are poised to gain once Washington signs an appropriate trade agreement with Beijing. This should happen in the coming weeks.
Wynn Resorts, and Qualcomm are two of the most notable.
Wynn Resorts Ltd. (NASDAQ:WYNN)
Goldman Sachs believes that a Sino US trade agreement will be a significant tailwind for Wynn Resorts, as the company has significant exposure in China’s economy via its Macao gambling operations.
Macao has become one of the most popular gambling locations in the world. It’s widely known as “Las Vegas of Asia.”
WYNN is highly susceptible to the trade tensions in China and US because nearly half of its adjusted property EBITDA originates from Macao.
Wynn’s main clientele, Chinese high-end gambling enthusiasts, would be more likely to spend if a deal was reached that reduced tariffs, improved economic relations, and increased consumer confidence.
The high-end hotel and casino giant announced disappointing results for the first quarter of its fiscal year.
Its financial situation could be significantly improved once both countries have signed a comprehensive deal.
Wall Street is still bullish about Wynn’s stock. The consensus rating currently stands at “overweight”.
Analysts expect the Nasdaq-listed firm to rise by an average of $105, which is a 10% increase from its current level.
Qualcomm Inc. (NASDAQ: QCOM).
Goldman Sachs says that a US-China deal could be a catalyst for Qualcomm’s stock, as the company is among the names with the greatest revenue exposure to Asia.
This multinational, based in San Diego, California is the global leader for 5G chipsets. It is also widely recognized as a provider of smartphone processors.
QCOM currently generates over half its revenues from China.
The expected US-China trade agreement that eases export restrictions and reduces tariffs on semiconductors is likely to boost sales.
The strength of Qualcomm’s financials is also worth buying.
The Nasdaq listed company reported in April that it had made $10.84billion for the second quarter of its financial year, which was a huge amount more than Street expectations.
The chipmaker also provided better than expected guidance for the Q3 results.
This is one of the reasons why Wall Street has given QCOM a “overweight rating” by consensus.
Analysts expect the stock of semiconductors to rise by an average of $176, which would represent a potential increase of 17%. This is on top of its current dividend yield of 2.35%.
The post 2 top stocks to benefit from the US-China Trade Deal may change as new information becomes available
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