The Impact of an Aging Population on Markets
The growing trend of an aging global population is set to significantly affect various stock markets, as highlighted by Mizuho. With increasing life expectancy and declining fertility rates, the demographic of older individuals is projected to become a larger segment of the overall population, which will have substantial economic implications, particularly for companies catering to this demographic’s needs. Mizuho’s analysis indicates that spending among American consumers aged 75 and above is expected to nearly double within the next five years, reaching $1.6 trillion by 2030 and $2.2 trillion by 2035, escalating from the current $900 billion.
Changing Spending Patterns of Elderly Consumers
Older consumers tend to allocate their finances differently compared to the average consumer, prioritizing expenditures on healthcare and housing rental, necessitated by the demand for senior living arrangements, according to Mizuho’s analyst team. This shift in spending habits led the firm to evaluate which stocks are best positioned to prosper in this environment, resulting in a selection of top stock recommendations.
Highlighted Stocks Benefiting from Demographics
Among the recommended stocks, Encompass Health stands out due to the rising healthcare costs associated with an aging population. The company operates inpatient rehabilitation centers, catering specifically to seniors, many of whom deal with multiple health conditions. Analyst Ann Hynes notes that the firm’s focus on patients who require continued care after hospitalization positions it well for growth as the senior population expands. She has set a price target of $105, indicating a potential 6% increase from the stock’s recent closing price.
Medical Technology and Glaukos
Another noteworthy stock is Glaukos, which specializes in glaucoma treatments. Analyst Anthony Petrone emphasizes that the incidence of glaucoma is projected to rise significantly for those aged 80 and above by 2035. Glaukos, through its innovative glaucoma implants, is anticipated to experience substantial growth, with a target market expected to grow from $1.2 billion in 2025 to $1.9 billion by 2035. Petrone’s price target for Glaukos is $200, representing a potential 98% upside.
Home Improvement and Senior Housing Trends
Home Depot is also highlighted due to the trend of seniors wanting to age in place in their older homes, leading to increased spending on home improvements. Analyst David Bellinger notes that as a significant percentage of U.S. homes will exceed 40 years old by 2048, the demand for home repairs and maintenance is likely to rise. He places a target price of $450 on Home Depot, suggesting a 27% upside from the stock’s recent closing value.
Senior Housing Investments: Welltower and Ventas
As the population ages and more individuals seek assisted living, analysts suggest that real estate investment trusts like Welltower and Ventas will benefit. Analyst Vikram Malhotra prefers Welltower due to its scale and operational efficiency, raising his price target to $170 from $141. He also increased Ventas’s target to $75 from $68, indicating potential upsides of 14% and 11%, respectively.
Food Delivery and Active Nutrition Growth
Acknowledging the shift towards online conveniences, DoorDash is viewed as a prime opportunity, with analyst James Lee projecting a price target of $222, representing a 16% increase. In the active nutrition sector, Simply Good Foods shows potential growth due to the underutilization of protein products among seniors. Analyst John Baumgartner highlights a price target of $45, suggesting a 35% upside from its current position. This indicates a strong market gap that could be addressed through targeted marketing and product development aimed at older consumers.
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