Stocks with higher exposure to overseas operations could underperform under a Republican presidency, according to Wolfe Research. Less than two weeks are left until the U.S. presidential election. A Democratic versus Republican win could mean vastly different outcomes for investors. Republican nominee Donald Trump has expressed that should he regain the presidency, he will establish universal tariffs as a key economic policy tool. The former president has already proposed a 20% tariff on all imported goods and a higher 60% rate on Chinese products. Against this backdrop, Wolfe Research released a basket of stocks that might be impaired under a Trump presidency. These companies would be at risk either under a 10% universal duty or 60% China tariffs. Here were a few stocks from the list: Tariffs could be a headwind for clothing retailer American Eagle Outfitters , which has dipped 7% this year. Analysts are mostly neutral on the stock, with seven of the 11 covering the name rating it as a hold, according to LSEG. However, the average price target implies American Eagle stock could rise 21% from here. In a recent note, Bank of America analysts similarly highlighted American Eagle as a stock that is sensitive to tariffs on China. “Tariffs would likely increase inflation and could dampen consumer spending,” the bank wrote. Beauty and cosmetics manufacturer Estée Lauder , down about 40% this year, could also face repercussions under a Trump win. Last week, HSBC downgraded the name to a hold rating from buy on the back of concerns about the China market. “Recent trip to Greater China and warnings in the beauty segment point to an excessive optimism on our part,” the firm wrote. “Restructuring ongoing with morale likely leading to staff leakage and lack of external hire as CEO now our base case.” Analyst Erwan Rambourg lowered his target price on the stock to $100 from $130. This updated forecast implies shares of Estée Lauder could rise about 14% from their Wednesday close. Analysts are similarly overwhelmingly neutral on the name, but on average still believe the stock could rise 19% from its current levels, per LSEG. Caterpillar was another name on Wolfe’s list. Shares of the engineering equipment manufacturer have rallied 30% in 2024. Earlier in October, Morgan Stanley downgraded the stock to underweight from equal weight, citing mounting pressures in the company’s construction industries segment. Analyst Angel Castillo’s revised price target of $332, down from $349, is approximately 14% lower than where shares closed Wednesday. About half the analysts covering the stock have assigned it a hold rating, according to LSEG. The average price target implies Caterpillar could slide 7%. Other than these stocks sensitive to tariffs, Wolfe Research also suggested a few other ways to play the election. For instance, financials, U.S. industrials, energy and crypto stocks such as Goldman Sachs , Robinhood , Coinbase and Patterson-UTI Energy would likely outperform in the case of a Trump win. If Vice President Kamala Harris becomes the next president instead, Wolfe’s favored stocks to buy would include NextEra Energy , Centene and AES Corp .
