MW Goldman Sachs is pinning hopes on these consumers in 2026. Here are the stock picks.
By Barbara Kollmeyer
TJX, Nike and more stocks cater to the middle-income consumer
A'ja Wilson #22 of the Las Vegas Aces signs a pair of her Nike A'One signature shoes on June 25, 2025 in Las Vegas, Nevada. Goldman Sachs is counting on Nike and other companies that cater to the middle-income investor in 2026.
Investors have been holding their breath over the state of the consumer, but Goldman Sachs says the middle-income consumer is doing fine and can be relied on for growth next year.
"We expect that stocks with exposure to the middle income consumer will continue to outperform in coming months," said a team led by Ben Snider, who is taking over from Goldman's retiring chief equity strategist David Kostin.
Kostin himself said in a podcast recently that despite worries about consumer income and job prospects with unemployment rising, those consumers will likely see the benefits next year from tax reform.
Snider and the team said consumer stocks catering to middle-income consumers are currently trading at discount valuations, but should see benefits from rising revenue in 2026. Among their stocks with exposure to those consumers are nine restaurants, 11 leisure and hospitality firms and 19 discretionary retail stocks.
"The recent trajectory of valuations for the group has been closely tied to changes in middle income consumer sentiment. To the extent that tax refunds and labor market stabilization improve sentiment among this income cohort, the valuations of middle income consumer stocks should rebound as well," said Snider and his colleagues.
TJX Cos.$(TJX)$, Nike $(NKE)$, Starbucks $(SBUX)$, Royal Caribbean $(RCL)$ and Hilton Worldwide Holdings $(HLT)$ are among the screen of stocks identified by Goldman Sachs analysts that have exposure to middle-income consumers. Here's their list:
Company Ticker Industry YTD Return (%) Distance from 52-Week High (%) Fwd P/E 12M (x) Consensus Sales growth 2025 (%) TJX Companies Inc TJX Discretionary Retail 26 (2)% 30 6 Nike Inc. NKE Discretionary Retail (11) (20) 32 (5) Starbucks Corporation SBUX Restaurants (4) (27) 34 3 Royal Caribbean Group RCL Leisure & Hospitality 13 (29) 15 9 Hilton Worldwide Holdings Inc. HLT Leisure & Hospitality 11 (4) 30 7 Ross Stores, Inc. ROST Discretionary Retail 18 (1) 25 6 Carnival Corporation CCL Leisure & Hospitality 4 (21) 11 7 Tractor Supply Company TSCO Discretionary Retail 4 (13) 24 5 Ulta Beauty Inc. ULTA Discretionary Retail 23 (6) 20 7 Darden Restaurants, Inc. DRI Restaurants (3) (22) 16 8 Dick's Sporting Goods, Inc. DKS Discretionary Retail 1 (10) 15 26 Burlington Stores, Inc. BURL Discretionary Retail (10) (15) 24 8 Best Buy Co., Inc. BBY Discretionary Retail (10) (19) 11 1 Gap Inc. GPS Discretionary Retail 16 (8) 12 2 MGM Resorts International MGM Leisure & Hospitality 2 (12) 14 1 Five Below, Inc FIVE Discretionary Retail 60 0 28 19 Levi Strauss & Co. LEVI Discretionary Retail 32 (10) 15 (2) Norwegian Cruise Line Holdings Ltd NCLH Leisure & Hospitality (27) (35) 7 5 Dutch Bros, Inc. BROS Restaurants 16 (29) 70 26 V.F. Corporation VFC Discretionary Retail (12) (31) 21 (4) Brinker International, Inc. EAT Restaurants 8 (25) 13 17 CAVA Group, Inc. CAVA Restaurants (52) (64) 94 22 Wyndham Hotels & Resorts, Inc. WH Leisure & Hospitality (27) (35) 14 2 Caesars Entertainment, Inc. CZR Leisure & Hospitality (31) (42) NM 2 Crocs, Inc. CROX Discretionary Retail (19) (27) 7 (3) Travel + Leisure Co. TNL Leisure & Hospitality 40 (2) 9 3 Kontoor Brands, Inc. KTB Discretionary Retail (10) (21) 13 19 Choice Hotels International, Inc. CHH Leisure & Hospitality (38) (44) 12 (1) Bath & Body Works, Inc. BBWI Discretionary Retail (49) (54) 7 (3) PVH Corp PVH Discretionary Retail (27) (30) 7 3 Victoria's Secret & Company VSCO Discretionary Retail 0 (15) 19 3 Academy Sports and Outdoors, Inc. ASO Discretionary Retail (14) (19) 8 3 Shake Shack, Inc. SHAK Restaurants (38) (44) 50 16 Cheesecake Factory Incorporated CAKE Restaurants 3 (30) 12 4 United Parks & Resorts Inc. PRKS Leisure & Hospitality (36) (40) 9 (3) Six Flags Entertainment Corporation SIX Leisure & Hospitality (68) (69) NM 13 Petco Health & Wellness Company, Inc. WOOF Discretionary Retail (20) (42) 18 (3) Sweetgreen, Inc. SG Restaurants (78) (84) NM 1 Bloomin' Brands, Inc. BLMN Restaurants (42) (49) 7 (8) Median stock (16)% (25)% 15x 3 % Median S&P 500 Stock 18 (11) 19 5
Source: FactSet, Goldman Sachs Global Investment Research
One key risk to the performance of those stocks is a further weakening of the labor market, said the strategists, noting that while jobless claims remain low, measures of layoff announcements have been on the rise in recent months.
"If layoffs increase, the revenue growth and valuations of consumer stocks will likely disappoint relative to our current expectations," they said. Should that happen, they see opportunities in consumer staples, such as Pilgrim's Pride $(PPC)$, Campbell's $(CPB)$, Albertsons (ACI), Brown-Forman $(BF.B)$ and Reynolds Consumer (REYN).
Here's a full list of their picks of consumer staple stocks with low valuations vs. history and high short interest:
Company Ticker Industry YTD return (%) Short interest as % of market cap NTM P/E percentile vs. past 5yr Pilgrim's Pride Corporation PPC Food Products 2% 18 % 17 % Campbell's Company CPB Food Products (27) 16 3 Albertsons Companies, Inc. ACI Consumer Staples Distribution & Retail (7) 14 17 Brown-Forman Corporation BF.B Beverages (20) 13 7 Reynolds Consumer Products Inc REYN Household Products (7) 13 7 Boston Beer Company, Inc. SAM Beverages (35) 12 0 e.l.f. Beauty, Inc. ELF Personal Care Products (35) 11 7 Molson Coors Beverage Company TAP Beverages (18) 11 7 Flowers Foods, Inc. FLO Food Products (45) 9 0 Celsius Holdings, Inc. CELH Beverages 62 9 6
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