The U.S. presidential election is here, and a second Trump victory could bring massive changes. During his speech at former President Donald Trump’s Madison Square Garden rally last week, Tesla and SpaceX CEO Elon Musk said he would want to cut $2 trillion from the federal budget . This comes as the Republican nominee and former president has promised to appoint Musk as the head of a government efficiency commission, if elected. Due to this, Piper Sandler has unveiled a list of stocks that it views as most sensitive to government spending. The investment bank noted that these names have traded “very closely” with election odds. “If Trump wins, these stocks are likely to be hurt by cuts in government spending,” Piper Sandler’s chief investment strategist Michael Kantrowitz said in a recent note to clients. “If [Vice President Kamala] Harris wins, these stocks are likely to benefit.” Below are some names on the list. For Boeing , 37% of the company’s revenue in 2023 came from U.S. government contracts, according to its latest annual report . Shares have already been struggling this year, dropping about 40%. The plane maker had seen most of its airplane production halted since the middle of September as more than 32,000 of its unionized machinists went on strike . In its wake, Boeing launched a stock offering last week to raise up to $22 billion to shore up its finances. To date, a majority of Wall Street is still bullish on the name, with 17 of the 30 analysts covering it having a strong buy or buy rating, per LSEG. Its average price target of $183.58 reflects more than 18% upside from Monday’s close. In the defense space, Lockheed Martin could also take a hit with a Trump victory. The company was the top recipient of defense contracts from the Department of Defense in fiscal 2023, being awarded $61.4 billion in defense spending. During September’s presidential debate, Trump clashed with Harris over funding efforts, with Harris accusing Trump of being prepared to abandon consistent U.S. support for Ukraine . That said, Lockheed Martin still sees gains ahead, lifting its full-year forecast for earnings per share last month despite missing revenue estimates for the third quarter. Year to date, the stock has already risen nearly 20%. While the Street is split on the name, with 12 of the 24 analysts covering it having a strong buy or buy rating, its average target of $603.83 also implies more than 11% upside ahead, as of Monday’s close. A new Trump presidency could also spell cuts to federal health spending . In that area, Humana , which offers Medicare Advantage plans, and UnitedHealth are two names Piper Sandler thinks could be affected. While shares of Humana have plunged more than 44% in 2024, UnitedHealth shares have moved in the opposite direction, gaining about 6%.
