Shares of FLIR Systems (FLIR) and some of its peers are on the rise on Monday, April 20, following a report by Reuters saying that Amazon (AMZN) has begun to use thermal cameras at its warehouses to accelerate screening for employees who may have contracted coronavirus. Commenting on the news, William Blair analyst Louie DiPalma said that even if Amazon is using a thermal camera vendor other than FLIR for some warehouses, he expects the company to benefit from what may become "a major trend."

THERMAL CAMERAS TO SCREEN FOR FEVERS

Amazon has begun to use thermal cameras at its warehouses to accelerate screening for employees who may have contracted coronavirus, Reuters' Jeffrey Dastin and Krystal Hu reported over the weekend, citing employees. Amazon set up the hardware for the devices in at least six warehouses outside Los Angeles and Seattle, and the company did not disclose whose devices it was using. One employee at a warehouse outside Seattle said the technology came from Infrared Cameras Inc. in Texas, according to the report.

'MAJOR TREND'

Commenting on the news report, DiPalma notes that while the Reuters article suggests that Amazon may be using a thermal camera vendor other than FLIR for some warehouses, he expects FLIR to benefit from what may become "a major trend." With "visionary industry leaders" such as Amazon now planning to use thermal cameras to screen employees on a daily basis, and other companies intending to screen customers, DiPalma now believes that temperature screening sales may be a material contributor to FLIR's $1.8 billion in annual sales.

It is likely that thermal cameras will be more commonly used as a screening device for large gatherings, he added. Nonetheless, the analyst believes COVID-19 will have a net neutral impact on FLIR revenue; as the company’s cyclical sales in its Industrials Business Unit to manufacturing, chemical, and construction verticals will be negatively correlated with fever screener sales. He has an "Outperform" rating on the shares.

THERMAL IMAGING COULD BE BRIGHT SPOT

As the global economy tries to reopen, Roth Capital analyst Darren Aftahi believes thermal imaging could be an area of extreme focus for enterprises, retail, workplaces, government entities, and all venues in general. While thermal imaging is not foolproof - especially for asymptomatic COVID-19 individuals - it is a means to help mitigate those with fevers from entering premises, he contended.

With the use of third-party thermal cameras, Aftahi believes Remark Holdings (MARK) has developed a compelling Artificial Intelligence solution for this issue, which is currently being tested/implemented by clients. The analyst also pointed out that, according to Remark’s Twitter account, it appears to be either testing and/or implementing with both the Las Vegas Police Department, as well as Wynn Resorts (WYNN). Aftahi has a "Buy" rating and a $4 price target on Remark's shares.

WHAT'S NOTABLE

Earlier this month, B. Riley FBR analyst Marc Wiesenberger upgraded LightPath Technologies (LPTH) to "Buy" from "Neutral," with a price target of $2.10; up from 75 cents. The analyst argued that the company should benefit from the mass temperature screenings associated with COVID-19.

PRICE ACTION

 In morning trading, shares of FLIR have gained over 12% to $38.36, while Remark's stock has jumped almost 16%. Also higher, shares of LightPath have risen about 13%, to $1.60.