MCD, BUD, ROST, WMT & REGN - 5 Defensive Stocks to Trust for a Potential Recession
As the economy shows signs of cooling and potential rate cuts push us closer to a recession, it’s smart to add some solid, defensive stocks to your portfolio. Here are five stocks that have shown they can handle tough times and are worth watching.
1. $McDonald's(MCD)$
McDonald’s is having a rough start in 2024, with global sales down 1% for Q2 and revenue slightly missing expectations at $6.49 billion. But let’s not forget, McDonald’s held strong during the 2020 pandemic.
UBS has lowered its price target to $305 but still rates it a “Buy,” expecting better performance in the second half of the year. Despite recent challenges, McDonald’s resilient business model and focus on value should keep its stock steady.
2. $Anheuser-Busch Inbev SA(BUD)$
Anheuser-Busch InBev, home to over 500 beer brands worldwide, saw a 2.7% revenue increase and a 10.2% rise in EBITDA for Q2 2024. The stock has been stable and low in volatility. Analysts have a “Hold” rating with an average target price of $73.
With limited downside risk and a possibly undervalued stock, it could be a good bet if consumers lean towards budget-friendly options during a recession.
3. $Ross(ROST)$
Ross Stores had a strong start to 2024 and looks well-positioned to benefit from a downturn. The company’s focus on discounted branded goods attracts budget-conscious shoppers.
With inflation squeezing discretionary spending, more people might turn to Ross for bargains. Analysts have a “Buy” rating with a target price of $163. While short-term profits might take a hit, Ross’s strategy to capture market share seems solid.
4. $Wal-Mart(WMT)$
Walmart has been on a roll, with strong sales growth driven by its booming e-commerce business and new services. For Q1 of fiscal 2025, Walmart reported a 6% revenue increase to $161.5 billion, and EPS of $0.60, beating expectations.
Walmart’s appeal to high-income consumers and a 22% growth in e-commerce boost its position. Even though the stock is nearing historic highs, Walmart is in a great spot to profit from cash-strapped consumers if a recession hits.
5. $Regeneron Pharmaceuticals(REGN)$
Regeneron Pharmaceuticals is making waves with its groundbreaking drugs for serious conditions. The company posted double-digit revenue and profit growth for Q2 2024. Despite rising competition, its eye disease drug Eylea still leads with a 45% market share.
With over 35 clinical projects in the pipeline, analysts are generally upbeat, with a target price of $1169, above the current price of $1121. Keep an eye on this biotech stock, especially with potential political changes on the horizon.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
