Trump Trade: President-elect may soften stance on tariffs

Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President-elect Trump with this daily recap compiled by The Fly:

TARIFFS: Aides to President-elect Donald Trump are considering tariff plans that would be applied to every country, but would cover only critical imports, a shift from his plans during the 2024 presidential campaign, The Washington Post’s Jeff Stein reports. If implemented, Trump’s plans would still be likely to carry major consequences for the U.S. economy and consumers, but would pare back the most sweeping elements of Trump’s campaign plans.

Trump previously called for “universal” tariffs of as high as 10% or 20% on everything imported into the U.S. It is unclear which imports or industries would face tariffs, though sources say preliminary talks have largely focused on several key sectors that the Trump team wants to bring back to the U.S., including the defense industrial supply chain through tariffs on steel, iron, aluminum and copper, medical supplies, and energy production, through batteries, rare earth minerals, and solar panels.

Publicly traded steel companies that may be impacted include ArcellorMittal (MT), Steel Dynamics (STLD), Nucor (NUE), and U.S. Steel (X), with copper companies including Southern Copper (SCCO) and Freeport McMoRan (FCX), and iron companies including BHP (BHP), Rio Tinto (RIO), Vale (VALE), and Cleveland-Cliffs (CLF).

Publicly traded solar companies that may be impacted include Array Technologies (ARRY), Emeren (SOL), FTC Solar (FTCI), First Solar (FSLR), Maxeon Solar (MAXN), Shoals Technologies (SHLS), SolarEdge (SEDG) and SunPower (SPWR).

Publicly traded rare earths companies include MP Materials (MP), Energy Fuels (UUU), and NioCorp (NB).

VERY WELL POSITIONED: RBC Capital keeps an Outperform rating and $27 price target on Kratos Defense (KTOS) after the company announced its $1.45B five-year OTA contract for the Multi-Service Advanced Capability Hypersonic Test Bed, MACH-TB, contract. The DoD hypersonics activity is not as visible as it was several years ago, but the funding for hypersonics will see an increase as technologies continue to mature, the firm tells investors in a research note. RBC maintains its view that Kratos is “very well positioned” under the second Trump administration, with space, unmanned flight, missile/missile defense, and hypersonics seen as “key growth markets.”

RATING, PRICE TARGET CHANGES:

Mizuho upgraded Tractor Supply (TSCO) to Outperform from Neutral with a price target of $60, up from $54. The firm enters 2025 optimistic that the fundamental underpinnings of firmer consumer spending remain intact. 2025 should be a year characterized by elevated headline risk under a “new, very business-friendly administration,” the firm tells investors in a research note. With a retailing group particularly exposed to tariffs, Mizuho highlights the “more inelastic demand categories” of auto parts and home improvement as better-situated. Within this framework, the firm upgraded Tractor Supply to Outperform.

Mizuho also lowered the firm’s price target on Neutral-rated Leslie’s (LESL) to $3 from $4, and on Outperform-rated Valvoline (VVV) to $42 from $46.