Elevated interest rates, lingering inflation and an inverted Treasury yield curve have some investors concerned a recession may be coming.
When the economy tanks, even most high-quality stocks get dragged down with it. During the past two U.S. recessions in 2008 and 2020, however, there were still a handful of stocks that significantly outperformed the S&P 500. These recession-resistant stocks might help investors play defense if the U.S. dips into a recession in 2024.
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Here are seven stocks CFRA Research analysts recommend that outperformed the S&P 500 in both 2008 and 2020:
| Stock | Implied upside from Feb. 21 close |
| Walmart Inc. (ticker: WMT) | 4.8% |
| Abbott Laboratories (ABT) | 6.9% |
| Synopsys Inc. (SNPS) | 6.3% |
| Accenture PLC (ACN) | 3.6% |
| T-Mobile US Inc. (TMUS) | 12.8% |
| Walt Disney Co. (DIS) | 11.5% |
| Netflix Inc. (NFLX) | 6.4% |
Walmart Inc. (WMT)
It’s no surprise that discount retailer Walmart outperformed during each of the past two recession years. Americans can’t go without groceries when times get tough, but they can save money by bargain hunting at Walmart. Analyst Arun Sundaram says Walmart has opportunities to expand its margins in the next several years as it deploys new technology and automates elements of its business and supply chain. Sundaram says the company has also built a “flywheel” ecosystem that includes advertising, health care, and financial and fulfillment services. CFRA has a “buy” rating and $182 price target for WMT stock, which closed at $173.70 on Feb. 21.
S&P 500 outperformance: 5.1% (2020), 56.3% (2008)
Abbott Laboratories (ABT)
Abbott Laboratories is a diversified health care products company. It’s understandable why many health care stocks performed well during the pandemic in 2020, but Abbott’s shares outperformed by an even wider margin in 2008. Analyst Sel Hardy says Abbott’s growing market share, innovative and diversified business, and growing dividend will help the company outperform its peer group in the long term. A drop in COVID-19 sales hurt Abbott’s overall numbers in 2023, but Hardy projects sales growth will rebound back into positive territory in 2024. CFRA has a “buy” rating and $126 price target for ABT stock, which closed at $117.87 on Feb. 21.
S&P 500 outperformance: 9.8% (2020), 33.6% (2008)
Synopsys Inc. (SNPS)
Synopsys provides a platform on which engineers can design and test semiconductors and other software applications. The global semiconductor industry is a secular growth market, so demand for chip testing and design services is constant — even during an economic downturn. Analyst Brooks Idlet says Synopsys has a sustainable revenue and earnings growth profile, as demand for increasingly complex, high-end chips and multi-chip packages continues to rise. The company also has a high degree of financial visibility because more than 80% of its revenue is recurring. CFRA has a “buy” rating and $578 price target for SNPS stock, which closed at $543.57 on Feb. 21.
S&P 500 outperformance: 70% (2020), 9.9% (2008)
[15 Best Dividend Stocks to Buy for 2024]
Accenture PLC (ACN)
Accenture is a global information technology services firm. The company generates about half its revenue from North America, about a third from Europe and the remainder from other parts of the world. Accenture’s diversified consulting and services business made it recession-resistant in the past and will likely continue to do so in the future. Idlet says Accenture’s strong balance sheet, impressive earnings growth and loyal customer base will continue to create value for investors. He says Accenture is highly exposed to attractive secular growth trends. CFRA has a “buy” rating and $374 price target for ACN stock, which closed at $360.91 on Feb. 21.
S&P 500 outperformance: 7.8% (2020), 29.5% (2008)
T-Mobile US Inc. (TMUS)
T-Mobile is one of the largest U.S. wireless providers. The company has generated consistent growth in a challenging industry, even during economic downturns. Analyst Keith Snyder says T-Mobile will continue to gain market share and customers from its peers, and its 5G network is far more advanced than the networks of AT&T Inc. (T) and Verizon Communications Inc. (VZ). Snyder says the launch of next-generation mobile devices and simplified pricing plans will be growth catalysts for T-Mobile in 2024 and beyond. CFRA has a “strong buy” rating and $185 price target for TMUS stock, which closed at $164.05 on Feb. 21.
S&P 500 outperformance: 55.7% (2020), 14.8% (2008)
Walt Disney Co. (DIS)
Walt Disney is one of the largest and most diversified media and entertainment companies in the world. That diversification has helped Disney’s business remain in high demand during a wide range of economic conditions, including a global pandemic. Even when Disney’s theme parks, cruise business, and movie and TV studios were shut down in 2020, Disney+ streaming subscriptions surged. Analyst Kenneth Leon says a greater focus on execution, cost cutting and strategic realignment will help Disney unlock the value of its unique assets. CFRA has a “buy” rating and $120 price target for DIS stock, which closed at $107.67 on Feb. 21.
S&P 500 outperformance: 9% (2020), 8.8% (2008)
Netflix Inc. (NFLX)
At first glance, it may seem strange that video streaming service Netflix, which relies on discretionary spending, would perform so well during economic downturns. Netflix’s strength in 2008 and 2020 may have to do with people cutting back on pricey entertainment options during financial hardship. Netflix provides access to thousands of shows and movies for as low as $6.99 per month. Leon says the shift from linear TV to streaming will continue, and no other platform can compete with Netflix’s programming, technology and global distribution. CFRA has a “buy” rating and $610 price target for NFLX stock, which closed at $573.35 on Feb. 21.
S&P 500 outperformance: 50.9% (2020), 50.8% (2008)
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Update 02/22/24: This story was previously published at an earlier date and has been updated with new information.
