5 tech stocks in supply chain management could benefit from Trump’s tariffs, Redburn Atlantic says
President-elect Donald Trump’s proposed steep tariffs on imports could create winners in the stock market — particularly among companies that help businesses manage their supply chains, according to Redburn Atlantic. 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 shares of all these global companies are traded in the U.S. and Europe. These supply chain management (SCM) firms provide software that helps companies navigate complex international trade rules and adjust quickly to changes in tariffs and regulations. “SCM outperforms in periods of supply chain uncertainty as it enables enterprises to be more quick, agile and accurate in their supply chain decision-making,” said Redburn Atlantic’s analyst Lachlan Brown in a note to clients on Nov. 20. The analyst noted that similar companies performed strongly during the 2018-2019 trade tensions between the United States and China. Trump has proposed tariffs of 25% on all products from Mexico and Canada, and additional tariffs on goods from China. He has also suggested lowering the corporate tax rate to 15% for domestic producers, down from the current 21%. Descartes Systems Descartes Systems stands out as “the clear winner” according to Redburn Atlantic, which raised its target price for the company’s shares to $110 from $88. However, the stock has rallied past the price target in recent days. Descartes’ software helps companies track real-time tariff changes and manage trucking logistics — both crucial capabilities if Trump’s policies take effect. Kinaxis Kinaxis, which helps companies plan their supply chains using digital replicas of physical operations, could also benefit, according to Redburn Atlantic. The investment firm said the company’s subscription-based revenue model provides stability even if international trade volumes decline. Manhattan Associates Manhattan Associates could benefit from increased domestic warehousing demand as companies shift production to the U.S. in response to Trump’s proposed corporate tax cut to 15% for domestic producers, according to Redburn. “Its newly released (October 2024) supply chain planning tool has also become more relevant,” the analyst added. SPS Commerce SPS appears to be primarily a U.S.-focused firm with 84% of domestic sales, but it also has significant international trade exposure, according to Redburn’s analyst. “While the US represents 84% of its revenues, as this is where its customers are based, we estimate that SPS Commerce has c25% of its revenue base linked to US suppliers that are reliant on international sourcing,” the analyst noted. SPS Commerce would also be boosted significantly by Trump’s proposed tax cuts, as about 60% of its revenue comes from suppliers with domestic sourcing. WiseTech Global WiseTech offers a “high-growth profile” investment opportunity that will benefit from the tariff trend, according to Redburn Atlantic. “Overall, we expect WiseTech Global … to be slightly better off under a Trump administration given that global trade uncertainty will drive demand for its solutions … and its customs and compliance systems,” the Redburn Atlantic analyst said. While the company might face a small revenue headwind from a potential dip in trade volumes, its upcoming product releases could help investors look past any minor impacts, the analysts added. — CNBC’s Michael Bloom contributed reporting.
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