Score a Brexit discount on these 13 stocks

- Matt Krantz @mattkrantz USA TODAY

The Brexit shock isn’t just making traveling to London a bargain. Savvy investors are looking for big discounts on stocks that were overly punished in the Brexit mayhem.

Thirteen stocks in the Standard & Poor’s 500 — including Royal Caribbean Cruises, discount brokerage firm Charles Schwab and appliance maker Whirlpool — have been overly pummeled relative to analysts’ forecasts, according to a USA TODAY analysis of data from S&P Global Market Intelligen­ce.

Each of these stocks was cranked 9.9% or more in the wake of the United Kingdom’s vote to exit the European Union last week prior to Wednesday’s bounce. Yet even after the market’s rally Wednesday, these stocks are predicted to be worth at least 15% more in 18 months, based on analysts’ average price targets. They are all rated “outperform” or “buy” by analysts on average, and each of these companies is expected to post at least 10% higher adjusted profit this calendar year.

Investors are hoping they’ve seen the worst of the initial reaction to Brexit. More than $3 tril- lion in global market value was erased in the first two days following the vote, the largest twoday destructio­n of wealth in history, Howard Silverblat­t of S&P Dow Jones Indices says. But stocks staged a strong bounce on Day 3 and Day 4, with the S&P 500 jumping 1.8% on Tuesday and 1.7% on Wednesday. The S&P 500 is now down 2% since Brexit Friday as of Wednesday.

Investors are trying to pick out stocks that might have been overly punished. Two cruise ship operators, Royal Caribbean and Carnival, have both sold off on the news. But while Royal Caribbean has been pushed down 14.9% through Tuesday and 12% through Wednesday to $67.83 a share, analysts are still calling for the stock to be worth nearly 41% more in 18 months. Adjusted earnings at the company are expected to rise nearly 30% this year.

Carnival on Tuesday gave investors more reason to be bullish after it reported 96% profit growth in its May quarter. Shares of Carnival are down roughly 10% since Brexit day to $43.73 and were off 11.4% through Tuesday, but analysts are calling for them to be worth nearly 33% more in 18 months.

Despite the Brexit’s initial shock, investors know the cruise industry is solid going forward, says John Staszak, analyst at Argus Research.

Some of what the industry has going for it: “affluent Baby Boomers (and) still largely untapped, lower fuel costs,” he says.

Some companies themselves are proclaimin­g that investors are overreacti­ng to the Brexit news. Whirlpool on Tuesday reaffirmed its profit guidance for 2016 to ease investors’ fears that its business would be hammered by Brexit. The company said that 5% of its revenue last year came from the U.K.

Financial stocks were understand­ably hammered by the Brexit concerns. Charles Schwab and E-Trade are among the hardest hit, falling 17.3% and 15.1%, respective­ly since the vote through Tuesday. Even after the rally, they were still down 15% Tuesday and 12% through Wednesday.

Analysts are worried that if the Federal Reserve puts hikes on short-term interest rates on hold, that could take away some interest income collected by financials such as brokerage firms.

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