According to Redburn Atlantic, President-elect Trump’s proposal to impose high tariffs on imported products could create winners in the stock market, especially companies that help companies manage their supply chains. The investment firm identified five stocks that could see their prices rise if Trump implements his proposed tariffs: Descartes Systems Group, Kinaxis, Manhattan Associates, SPS Commerce and WiseTech Global. The stocks of all these multinational companies are traded in the United States and Europe. These supply chain management (SCM) companies provide software that helps companies navigate complex international trade rules and quickly adapt to changes in tariffs and regulations. “Supply chain management excels during times of supply chain uncertainty because it enables companies to make supply chain decisions faster, more nimbly and more accurately,” Redburn Atlantic analyst Lachlan Brown said in a Nov. 20 note to clients. Trump proposed a 25% tariff on all products from Mexico and Canada, and additional tariffs on goods from China. He also proposed reducing the corporate tax rate for domestic producers to 15% from the current 21%, Redburn Atlantic said. Systems is a “clear winner” and the company raised its price target on the stock to $110 from $88. However, the stock has risen above the price target in recent days. Descartes’ software can help companies track real-time tariff changes. Managing freight logistics — both functions are critical if Trump’s policies take effect. Kinaxis Kinaxis, which uses digital replicas of physical operations to help companies plan supply chains, could also benefit, according to Redburn Atlantic. The investment firm said the company’s subscription-based revenue model provides stability even as international trade volumes decline. Redburn said Manhattan Associates is likely to benefit from increased domestic warehousing demand as the company shifts production to the United States. , in response to Trump’s proposal to cut corporate taxes on domestic producers to 15%. “Its newly released (October 2024) supply chain planning tool has also become more relevant,” the analyst added. SPS Commerce appears to be primarily a U.S.-focused company, with 84% of its domestic sales, but it also has a significant international trade presence, according to analysts at Redburn. The analyst noted: “While the United States accounts for 84% of its revenue because that is where its customers are located, we estimate that approximately 25% of SPS Commerce’s revenue base is related to U.S. suppliers that rely on international sourcing.” SPS Commerce will also be affected by It has been significantly boosted by Trump’s proposed tax cuts because about 60% of its revenue comes from domestically sourced suppliers. Redburn Atlantic said WiseTech Global presented a “high-growth” investment opportunity that would benefit from tariff trends. Redburn Atlantic analysts said: “Overall, we expect WiseTech Global’s performance to improve slightly under the Trump administration, given that global trade uncertainty will drive demand for its solutions and customs and compliance systems. . Analysts added that while the company may face minor revenue headwinds from a potential drop in trading volumes, its upcoming product launches may help investors look past any slight impact. — CNBC’s Michael Bloom contributed reporting.
