Analysts on Wall Street say that despite widespread outrage and media condemnation of guns following the school shooting in Parkland, Fla., Americans’ appetite for firearms will not subside anytime soon.
An American media report noted that analysts did not believe the current social and political climate in some parts of the country would negatively impact sales of guns by American Outdoor Brands Corp., the gunmaker formerly known as Smith & Wesson and a sort of bellwether for firearms manufacturers.
The company’s shares have fallen somewhat after police in Broward County, Fla., identified the AR-15 used by alleged shooter Nikolas Cruz, 19, was an American Outdoors model.
Shares are down 4.5 percent from the day before the Feb. 14 shooting through Monday’s close and have now dropped 24 percent since the start of the year.
Fallout from the shooting has led to “an unprecedented number of crosswinds affecting not only demand but perception,” wrote Wedbush Securities Inc., a securities firm and investment bank, in a report about American Outdoor released on Tuesday morning.
However, the company should make a strong comeback in the coming months, the report noted.
“[W]e continue to believe that these shares represent significant long-term value, as firearm demand is going nowhere, and the current series of events is likely to eventually give way to a much-more favorable operating environment.” [source]
Analysis: Two of the most common phenomena following such shootings is 1) a renewed call from some political quarters to ban such weapons; and 2) an increase in the sale of such weapons, as well as firearms in general. The same things happened after the Parkland shootings.
But the real danger to firearms companies’ future financial well-being is the loss of financial institutions willing to continue doing business with them. Bank of America Corp. over the weekend said it will engage with clients “that manufacture assault weapons for non-military use to understand what they can contribute to this shared responsibility.” Translated: BofA is considering whether to stop doing business with firearms companies that make so-called AR-15-style rifles.
In fact, there have already been widespread calls from Left-of-center politicians and anti-gun organizations for financial organizations like banks and financial transaction companies like PayPal and others to stop doing business with all gun makers. Several have already ended their relationship with the National Rifle Association, which is being blamed — incorrectly — for the shootings in Florida and other incidents.
This campaign of financial intimidation won’t stop and in fact, will only intensify following the next mass shooting, and there will be a ‘next mass shooting.’ The guns aren’t the problem, however; in prior decades guns were more prevalent per capita but these kinds of shootings rarely occurred.