The United States is currently grappling with a complex border crisis, projected to have repercussions across several sectors, including humanitarian, political, and economic. With a focus on the economy, selected disciplines, such as the stock market, will likely see a shift as the issue evolves.
While the human aspect remains important, several publicly traded companies face potential implications depending on how they react. Therefore, the following stocks have key underlying fundamentals that can potentially benefit them amid the crisis.
Lockheed Martin (NYSE: LMT)
As a leading defense contractor, Lockheed Martin (NYSE: LMT) stands to benefit from increased border security spending. Various political factions have proposed technological advancements, such as drones, to tackle the crisis, potentially translating into lucrative contracts for the company.
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Additionally, heightened concerns about illegal immigration and potential security threats might drive demand for Lockheed Martin’s surveillance and defense systems. It’s worth noting that Lockheed Martin has been a beneficiary of government contracts related to border security in the past.
As the crisis evolves, the LMT stock could receive a boost, especially considering that the company has mostly traded in the red zone over the past year. By press time, LMT was trading at $428.01, with year-to-date losses of 6%.
Johnson & Johnson (NYSE: JNJ)
The healthcare giant Johnson & Johnson (NYSE: JNJ) might see a rise in demand for its medical products and services due to the influx of migrants requiring medical attention. JNJ’s pharmaceutical arm could also benefit from increased government contracts for vaccines and other healthcare supplies to manage potential disease outbreaks among migrant populations.
Notably, this could boost JNJ, which posted stronger-than-expected earnings for the fourth quarter of 2023. For the fourth quarter, the company reported net earnings of $4.132 billion, or $1.70 a share, up from $3.227 billion, or $1.22.
JNJ was valued at $159.36 by press time, having dropped less than 1% in 2024.
FedEx Corporation (NYSE: FDX)
FedEx (NYSE: FDX), a multinational courier delivery services company, will likely be impacted by the border crisis in several ways. On a positive note, the surge in demand for humanitarian aid and essential supplies could boost FedEx’s shipping and logistics services. Therefore, investors should monitor the company’s adaptability and agility in responding to changing international trade dynamics.
On the flip side, increased border restrictions might pose logistical challenges for cross-border shipments.
Meanwhile, FDX continues to struggle, having lost 1.67% of its valuation, trading at $248.03 by press time.
While key fundamentals dominate the highlighted companies, the actual impact of the border crisis will depend on numerous factors, including future policy decisions, public sentiment, and global economic trends.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.