With Democratic presidential candidate Kamala Harris polling neck and neck with former President Donald Trump , Jefferies analysts assessed how her policy positions could result in specific stock reactions across several industry sectors. Based on policy proposals outlined in the 2024 Democratic Platform and Harris’ recent statements on the campaign trail, Jefferies identified those that “require minimal congressional action” — meaning they are more actionable and likely to take place if she assumes the presidency. Take a look at some of the policies Jefferies highlighted and which specific stocks it believes could be impacted. Food and grocery regulation Harris has proposed preventing “corporate price-gouging” in order to stem inflation. A Federal Trade Commission report in March that investigated corporate earnings showed that profit margins for grocery retailers increased to 7% in the first three quarters of 2023, outpacing the group’s pre-pandemic high of 5.6%, according to Jefferies. “She would designate new authority for the FTC and state attorneys general to investigate and levy new penalties on companies that violate these rules,” the firm wrote in a research note on Monday. Snack makers Kellanova, Mondelez and Hershey could face headline risks, the analysts said. President Joe Biden has previously called out snack companies to stop engaging in “shrinkflation. ” These companies would likely remain in focus as “talking points” due to their popular products. However, Jefferies noted that the proposed regulations “are harder in reality to implement.” MDLZ YTD mountain Mondelez shares year to date. The firm has a hold rating on Kellanova and Hershey , and a buy rating on Mondelez shares. Grocery stocks Walmart , Costco Wholesale and Target also face headline risks from increased scrutiny and regulation of profit margin increases. To be sure, they have already begun to work toward lowering costs, per Jefferies. “Notably, WMT has been running deflationary in its Walmart US & Sam’s Club segments as of the end of F2Q. Additionally, COST has been able to drive flat pricing for several consecutive Qs, while TGT recently announced that it is cutting prices on ~5,000 items,” said the firm. Analysts at Jefferies hold a buy rating on all three grocers. Antitrust reinforcement Under a Harris presidency, the Democratic party’s commitment to antitrust enforcement is likely to continue through initiatives that include hospitals, media companies and big technology names. Per Jefferies, the Department of Justice and the FTC raised 50 antitrust cases in 2022, which was the highest level since the U.S. initiated pre-merger antitrust reviews in 1976. Pharmaceutical giants Bristol-Myers Squibb , Merck and Pfizer — which frequently make headlines for mergers and acquisitions – may encounter continued scrutiny. Jefferies analysts are bullish on Merck and Pfizer, with buy ratings for both names. Meanwhile, the firm is sticking to the sidelines with its hold rating on Bristol-Myers Squibb. MRK YTD mountain Merck shares year to date. Across health systems, the Justice Department and the FTC have been active to curb large mergers under the Biden administration. This will likely continue under Harris, Jefferies forecasts, and may pressure shares of Community Health Systems , HCA Holdings and Tenet Healthcare . The firm holds a buy rating for the three health-care stocks. Megacap tech names may also experience headwinds through increased regulatory measures. Alphabet , which was recently ruled to have violated antitrust law to monopolize its Google search engine, “is unlikely to benefit from a change in administration,” Jefferies said. Other big tech stocks such as Meta , Amazon and Adobe may face hurdles in completing mergers and acquisitions under a Harris administration, the firm added. Nonetheless, Jefferies is optimistic on the broader outlook for these tech stocks. The firm has a buy rating for all four megacap tech names. Developing AI guidelines Standards for artificial intelligence security are expected to continue if Harris becomes president. Through the Biden-Harris administration’s executive order 14110 , the AI Safety Institute was created to establish AI policies ensuring safety. Music labels are positioned to potentially benefit under a Harris presidency, Jefferies said. WMG YTD mountain Warner Music Group shares year to date. “We view a Kamala Harris presidency as potentially favorable for content/ IP owners as the Democrats have already proposed new legislation via the Generative AI Copyright Disclosure Act,” said the firm. This law would protect music labels against content duplication by AI and likely establish a new licensing revenue stream, according to Jefferies. Analysts highlighted Warner Music and Universal Music Group as names positioned to benefit in this scenario. Both stocks are deemed a buy from Jefferies analysts. On the other hand, restrictions on the rollout of AI features could inhibit semiconductor manufacturers such as Nvidia , Advanced Micro Devices and Broadcom , according to Jefferies. Analysts are retaining their buy ratings on the chipmakers. —CNBC’s Michael Bloom contributed to this report.
