3 Stocks to Gain From Trump’s Return-to-Office Mandate

Key Points

• President Trump’s mandate for Federal workers to return to the office will have many positive implications for office furniture, food service, and transportation companies.
• Steelcase may see a reversal of fortune as its business was hit by remote work, but a return-to-office initiative may accelerate revenue again.
• Uber benefits from potential increases in both ride bookings and Uber Eats food deliveries, with surge pricing serving as the cherry on top.

 

 

On day one as the 47th President of the United States, Donald Trump signed an executive order mandating all federal employees to return to the office for work “as soon as practicable.” Administration officials released more directives aimed at ending remote work. While this may result in the termination of remote contracts with some workers, there are going to be a lot of beneficiaries of the mandate. Here are three stocks that can benefit from President Trump’s return to work mandate.

Steelcase: Chairs, Desks, and Office Furniture

Having more workers back in the office requires having the office furniture and equipment available for the workers. Steelcase Inc. NYSE: SCS provides furniture systems ranging from seating and storage to benches, tables, and complementary products like lighting and screens. The growth of remote work has hurt Steelcase, but now the trend may reverse as workers return to the office requiring their portfolio of products.

Are the Good Times Returning With the Workers?

On Dec. 18, 2024, Steelcase reported Q3 EPS of 30 cents, beating consensus estimates by 8 cents. Revenues rose just a scant 2.2% YoY to $794.9 million, missing consensus estimates of $796.58 million. Gross margin improved 100 bps. Orders declined modestly in the quarter, mostly from the 8% decline internationally. Orders in the United States actually rose 2% YoY.

The backlog fell by 5% YoY to approximately $664 million. However, orders in the first three weeks of the fourth quarter grew 15% YoY, which also included a number of large projects scheduled to ship beyond the end of the quarter. This could be the early sign of an upswing occurring just after Donald Trump won the presidential election.

In-Line Guidance Sets the Bar Low for 2025

Steelcase issued conservative in-line guidance for EPS of 20 cents to 24 cents versus 22 cents consensus estimates.

Revenues for Q4 are expected to be between $770 million and $775 million, which was short of the $834.64 million consensus analyst’s estimates. Steelcase stock trades at just 11.65x forward earnings.

Steelcase CEO Sara Armbruster commented, "As we continue to focus on serving our customers and supporting their workplace strategies, we posted another quarter of order growth in the Americas, and we are pleased with the improved trends we saw from our large corporate customers near the end of the quarter and into December."

Aramark: Office Workers Will Need to Eat

Many companies follow the work guidelines set by the Federal government. This means a return to the office for Federal employees can often result in a return to the office for many corporate workers as well. Cafeterias, cafes, and eateries can expect an influx of business as hungry workers return. Aramark NYSE: ARMK provides food services to businesses, education, healthcare, and industry. The company also provides facilities management, engineering solutions, and supply chain services to the consumer staples sector.

Steady Business Will See Acceleration in 2025

Aramark reported Q3 EPS of 54 cents, beating consensus estimates by 2 cents. Revenues rose 5.2% YoY to $4.42 billion, missing $4.46 billion consensus estimates.

Its full-year 2025 outlook aligned with EPS expected to grow 23% to 28% to $1.91 to $1.98 versus $1.93 consensus estimates. 

Organic revenue is expected to accelerate from 7.5% to 9.5% YoY growth. The company also authorized a $500 million stock buyback program. While the stock trades at 20.22 forward earnings, it also provides a 1.08% annual dividend yield.

Uber: More Commuters, More Traffic, More Rides and More Surge Pricing

While mass transit will see more riders returning to Federal offices, many commuters will opt to avoid parking and public transit and order a ride from Uber Technologies Inc. NYSE: UBER to work. As more passengers (pax) order rides around rush hour, prices are sure to climb due to surge pricing. This goes directly into Uber’s pockets. In Washington, D.C., two annual events drive up Uber’s business: the return of Congress and the return of students. The return of Federal workers to government offices may be a third factor starting in 2025.

Uber Continues Its Path to Profitability

Uber reported Q3 2024 EPS of $1.20, crushing analyst estimates by 83 cents. Revenues rose 20.4% YoY to $11.19 billion, beating the $10.99 billion consensus estimates. Gross Bookings rose 16% YoY to $41 billion. Mobility Gross Bookings grew 17% YoY to $21 billion. Trips during the quarter also grew 17% YoY to 2.9 billion. Delivery gross bookings rose 16% YoY to $18.7 billion.

More Uber Eats Orders Expected

It’s also a certainty that many hungry office workers will just opt to order Uber Eats food delivery rather than trek down to their favorite restaurant, dealing with traffic and the struggle to find parking or risk getting run over by bicyclists and electric scooters. Uber Eats should also see a spike in business with more hungry workers back in the office. This factor likely wasn’t factored into its guidance, which could be an unexpected growth driver.

Forward Guidance Is Open for a Strong Beat

Uber expects Q4 2024 gross bookings of $42.75 billion to $44.25 billion or 18% to 20% YoY growth. YoY trip growth is expected to be the same as Q3 2024. Adjusted EBITDA is expected to grow 38% to 47% YoY from $1.78 billion to $1.88 billion.

Uber CFO Prashanth Mahendra-Rajah commented, “We hit another important milestone this quarter, delivering over $1 billion in GAAP operating income for the first time in our company's history, and are on track to deliver 20% Gross Bookings growth on a constant currency basis for the full year."