News of JetBlue’s $3.6bn takeover offer for Spirit Airlines dominated today’s headlines. While Bernstein analysts expect green hydrogen stocks to benefit from rising fossil fuel prices, lithium stocks could be weighed down due to a setback to Biden’s EV drive. In other news, Intel shares have bounced back from March lows and Barron’s highlighted 27 stocks that could survive a high inflationary environment.
Spirit shares jump after JetBlue bid
Spirit Airlines [SAVE] stocks climbed 22% after JetBlue [JBLU] offered to buy the airline for $3.6bn, or $33 per share. This follows the news in February that Frontier Airlines had agreed to acquire Spirit for $2.9bn in stock and cash. While Frontier said that the JetBlue deal would likely result in a hike in fares and a reduction in routes, JetBlue said the proposed acquisition could deliver $600–700m in net annual synergies.
Intel climbs 11% from March lows
Semiconductor giant Intel [INTC] has seen its share price fluctuate over the past year but seems to be recovering from its 52-week low last month. At the close on 5 April, the stock was up 8.4% from a low of $44.40 on 14 March. While semiconductor stocks have struggled, Intel is investing in new capacity and its autonomous driving business Mobileye.
Pricing power is key to battling inflation
Companies with high-price elasticity and few direct rivals are likely to perform better under current market conditions. Barron’s identified 27 stocks that have shown resilience during the coronavirus pandemic and which are better placed to survive a high inflationary environment, including Hilton [HLT], McDonald’s [MCD], Merck [MRK], Nvidia [NVDA], Accenture [ACN] and Lockheed Martin [LMT].
Headwinds for lithium stocks
Lithium stocks rose after reports that President Biden would sign the Defense Production Act this week. The Act would provide support to producers of minerals for electric vehicle (EV) batteries. However, the sector faced bad news when senator Joe Manchin told an event yesterday that he “will not sign up” for Biden’s EV drive. Manchin raised concerns that the domestic mineral supply chain is underdeveloped and that it is unclear who would receive the revenue generated from taxpayer-funded charging points.
Bernstein bets on green hydrogen
In a note on 30 March, Bernstein analysts said that green hydrogen is likely to benefit from rising fossil fuel prices and an acceleration in the shift towards clean energy sources. The bank picked out four potential winners in the green hydrogen space, including US fuel cell company Plug Power [PLUG], Canada’s Ballard Power Systems [BLDP], China’s SinoHytec [688339.SS] and South Korea’s Doosan Fuel Cell [336260.KS].
Helium One shares balloon
Demand for green helium gas has never been higher, and supplies have never been shorter. But Helium One Global [HLOGF] reckons it has struck natural gas gold with its plans to drill in Tanzania. Investors have been closely following the helium producer business, lifting the Helium One share price up 19.7% since the start of the year.
Tilray awaits Senate vote on cannabis legalisation
Tilray Brands [TLRY] has seen its stock climb since the start of the year, boosted by hopes that the US could lift the federal ban on cannabis. Although the Marijuana Opportunity Reinvestment and Expungement (MORE) Act has not made it through the Senate yet, the market is ripe for growth and Tilray is a key player in the global medical cannabis market.
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