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Tesla, Wynn Fare Poorly When Dollar Rises: BofA

The dollar has scored big this year, with the Bloomberg Dollar Spot Index gaining 4.5%. That’s a big number for the greenback, which generally moves much less than stocks.

Solid U.S. economic growth and rising interest rates have attracted investors to the dollar. Russia’s war on Ukraine also has boosted the currency, as investors view it as a safe haven in times of world turmoil.

If you’re a stock investor, you might want to avoid stocks that suffer from a climbing dollar. Bank of America has put together a list of the S&P 500 stocks most hurt by a rising dollar over the past 10 years.

The list, in order of negative sensitivity to the dollar’s strength, starting with the most negative, includes:

· Freeport-McMoRan  (FCX) – Get Freeport-McMoRan, Inc. Report, a mining company,

· Tesla  (TSLA) – Get Tesla Inc Report, the electric car giant,

· Wynn Resorts  (WYNN) – Get Wynn Resorts, Limited Report, a casino company,

· United Rentals  (URI) – Get United Rentals, Inc. Report, an equipment rental company,

· MGM Resorts  (MGM) – Get MGM Resorts International Report, a casino company,

· Caesars Entertainment  (CZR) – Get Caesars Entertainment Inc Report, a casino company,

· Trimble  (TRMB) – Get Trimble Inc. Report, an industrial technology company,

· PVH  (PVH) – Get PVH Corp. Report, a clothing company that owns Tommy Hilfiger,

Scroll to ContinueTheStreet RecommendsPERSONAL FINANCEMemorial Day Will be Different This Year8 hours agoINVESTINGDISWhat Is Twitter Saying About ‘Obi-Wan Kenobi’?9 hours agoINVESTINGPYPLSHOPWEXPayPal Doesn’t Make Wells Fargo Top Near-Term Fintech Picks10 hours ago· Caterpillar  (CAT) – Get Caterpillar Inc. Report, the construction equipment company, and

· Eastman Chemical  (EMN) – Get Eastman Chemical Company Report.

For a list of the stocks that benefit most from a rising dollar, see here.  

Morningstar Take on TeslaMorningstar analyst Seth Goldstein assigns Tesla a narrow moat and puts fair value for the stock at $750.

“Given that Tesla doesn’t spend money to advertise its products, we think the market intertwines the company’s brand with [Chief Executive] Elon Musk,” Goldstein wrote in a commentary.

“However, we see the larger brand driver coming from Tesla’s market-leading electric vehicle and autonomous driving technology.”

Further, “as the company continues to develop new vehicles and advance its autonomous driving technology, we see the company’s strong brand remaining intact,” Goldstein said.

“In our view, the larger near-term risk facing Tesla is the company’s ability to successfully rollout and begin mass producing its Cybertruck next year.” Goldstein noted strong competition in the electric-truck segment from Ford  (F) – Get Ford Motor Company Report, Rivian  (RIVN) – Get Rivian Automotive, Inc. Class A Report and General Motors  (GM) – Get General Motors Company Report.

Morningstar Take on WynnMorningstar analyst Dan Wasiolek assigns Wynn a narrow moat and puts fair value for the stock at $105. It recently traded at $65.

The shares are suffering from “concerns around how inflation and China’s Covid policy might impact future demand, potentially impairing the company’s ability to service its debt,” Wasiolek wrote in a commentary.

“We think investors are underappreciating Wynn’s demand opportunity and liquidity profile and see the [stock] pullback as an attractive entry point.” Wynn shares have slid 23% year to date.

“To reach a share price of around $70 per share in our discounted cash flow model, one would need to assume that Wynn’s Vegas assets show no sales growth in 2022 and 2023, along with no lift in Macao this year,” Wasiolek said. “We see this as unreasonable.”

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