Is It Time to Buy Rubio Stock?

Rubio has attacked Trump on health care. (REUTERS/Chris Keane)

A week ago, the mood among professional Republican strategists and conservative pundits was morbid. The activists who make up the party’s core strength outside the Beltway, it seemed, were intent on choosing between two candidates who equally galled the GOP establishment, albeit for different reasons. The race for the Republican nomination, it seemed, was a two-man contest between Texas Sen. Ted Cruz  and bombastic billionaire Donald Trump.

Then, the voters voted, and the sighs of relief from those establishment Republicans were almost audible.

Sen. Marco Rubio’s surprisingly strong third-place finish in the Iowa caucuses has establishment party stalwarts optimistic, once again, that the race for the Republican nomination is a three-person contest.

Rubio’s path to the nomination remains perilous, and dependent upon a number of variables that change on a seemingly daily basis. But as it stands today, the freshman from Florida represents the Republican establishment’s best hope at reasserting some semblance of control over a topsy-turvy election season.

His success or failure will be decided based on his ability to coalesce centrist Republicans — call them the business wing of the party — around his candidacy.

Building such a coalition is Rubio’s first, and most pressing, hurdle. The business wing of the Republican Party remains starkly divided among a handful of candidates, among them former Florida Gov. Jeb Bush, Ohio Gov. John Kasich, New Jersey Gov. Chris Christie and former Hewlett Packard executive Carly Fiorina.

All five contenders have spent heavily on television ads in New Hampshire, where the business wing dominates the Republican primary electorate, raising the specter of a divided electorate that gives more power to New Hampshire’s smaller conservative wing — potentially handing even more momentum to Cruz or Trump.

Recent polls in New Hampshire show Trump maintaining a lead, with about a third of likely Republican voters saying they’ll back the New Yorker. Cruz, Rubio, Kasich and Bush appear tangled in a fight for second and third, with Christie nipping at their heels.

Even a split decision is likely to winnow the Republican field further, as candidates who run out of money falter. Recently released fundraising reports show Christie, Kasich and Fiorina struggling to maintain a positive cash flow. Rubio and Bush are the only two business wing candidates who have spent serious money advertising in states beyond New Hampshire.

Therein lies the second hurdle Rubio must overcome: At some point, he actually has to win a state to emerge as the consensus business wing alternative to Cruz and Trump.

It increasingly appears that South Carolina is the Rubio campaign’s top target. His campaign has purchased more than $2.4 million in airtime across the first-in-the-South primary state over the next three weeks, while his super PAC has bought more than $2 million in airtime, according to data from a Republican source tracking the advertising market — more than any other campaign or super PAC over the same period. And Rubio has important validators in the state: Both Rep. Trey Gowdy from the Upstate and Sen. Tim Scott of the Lowcountry are publicly supporting him.

But polling still shows Rubio struggling to make up ground against his two main rivals. Together, two polls conducted in mid-January by Marist (for NBC News and the Wall Street Journal) and YouGov (for CBS News) show Cruz and Trump commanding nearly 60 percent of the South Carolina vote combined, while Rubio and the rest of the business wing candidates account for less than 30 percent.

Early-state contests are less about winning delegates who will attend the Republican National Convention than they are about establishing momentum ahead of more crowded primary dates. Rubio’s third major hurdle is to score a win, or at least to establish a media narrative that pegs him as the alternative choice ahead of Super Tuesday on March 1, when Republican voters in 14 states cast their ballots.

Other candidates — most notably Bush — have the chance to upend Rubio’s position as the third man in a three-man race. But Rubio’s third-place finish in Iowa has given establishment Republicans, and the donors who fund campaigns, hope for a resurgence.

Those who were once resigned to choosing between Cruz and Trump now have a third option, and they are buying Rubio stock while it remains relatively low.