Elevated interest rates, slowing economic growth and a growing international trade war have some investors concerned a recession may be coming. When the economy tanks, even most high-quality stocks get dragged down with it.
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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 2025. Here are seven stocks CFRA analysts recommend that outperformed the S&P 500 in both 2008 and 2020:
| Stock | Upside/Downside Potential* |
| Walmart Inc. (ticker: WMT) | 14.6% |
| Netflix Inc. (NFLX) | 15.1% |
| T-Mobile US Inc. (TMUS) | -3.8% |
| Accenture PLC (ACN) | 24.8% |
| NextEra Energy Inc. (NEE) | 17.8% |
| Synopsys Inc. (SNPS) | 41.0% |
| Arthur J. Gallagher & Co. (AJG) | 3.9% |
*Based on CFRA 12-month target price and Feb. 25 closing share price.
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 successfully navigated supply chain challenges and improved cost management, positioning the company to grow operating income at a faster pace than revenue in the next several years. Sundaram says Walmart can further improve margins in its e-commerce business and integrate additional technology to automate its supply chain. CFRA has a “buy” rating and $112 price target for WMT stock, which closed at $97.69 on Feb. 25.
S&P 500 performance: 16.3% (2020), -38.5% (2008) WMT performance: 23.3% (2020), 20% (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 times of economic difficulty. Netflix’s strength in 2008 and 2020 may have to do with Americans cutting back on pricey entertainment options during financial hardship. Netflix provides access to thousands of shows and movies for as low as $7.99 per month. Analyst Kenneth Leon says Netflix is expanding its global competitive advantage while many other streaming services are barely even profitable. CFRA has a “buy” rating and $1,125 price target for NFLX stock, which closed at $977.24 on Feb. 25.
S&P 500 performance: 16.3% (2020), -38.5% (2008) NFLX performance: 67.1% (2020), 12.4% (2008)
T-Mobile US Inc. (TMUS)
Following its 2020 merger with Sprint, T-Mobile is the second-largest U.S. wireless provider. T-Mobile has generated consistent growth in a challenging industry, even during economic downturns. Analyst Keith Snyder says T-Mobile is generating impressive free cash flow and churn trends. Even in an intensely competitive environment, Snyder says T-Mobile will outgrow its competitors and continue to gain market share. He says T-Mobile’s 5G network is still at least a year ahead of other major U.S. networks, and next-generation mobile device sales will help support growth. CFRA has a “strong buy” rating and $260 price target for TMUS stock, which closed at $270.54 on Feb. 25.
S&P 500 performance: 16.3% (2020), -38.5% (2008) TMUS performance: 71.9% (2020), -23.6% (2008)
Accenture PLC (ACN)
Accenture is a global information technologies services firm. The company generates nearly 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. Analyst Brooks Idlet says Accenture’s diversification, its strong balance sheet and its leadership in generative AI technology and cloud migration make it an excellent defensive investment in an uncertain macroeconomic environment. CFRA has a “strong buy” rating and $453 price target for ACN stock, which closed at $362.95 on Feb. 25.
S&P 500 performance: 16.3% (2020), -38.5% (2008) ACN performance: 26% (2020), -7.5% (2008)
NextEra Energy Inc. (NEE)
NextEra Energy is a utility holding company and is the parent of Florida Power & Light and NextEra Energy Resources. Utility sector stocks are generally considered defensive investments and are popular flight-to-safety plays during economic downturns. Utility companies have stable and predictable demand and cash flows, along with limited competition. Analyst Daniel Rich says NextEra’s strong balance sheet and large backlog of renewable energy projects will help support peer-leading revenue and dividend growth. CFRA has a “buy” rating and $84 price target for NEE stock, which closed at $71.28 on Feb. 25.
S&P 500 performance: 16.3% (2020), -38.5% (2008) NEE performance: 30.1% (2020), -23.5% (2008)
Synopsys Inc. (SNPS)
Synopsys provides a platform engineers can use to design and test semiconductor chips 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. Idlet says Snyopsys has a sustainable growth profile led by its design automation and design IP segments. About 80% of revenue is recurring, providing exceptional financial visibility. Idlet says Synopsys is perfectly positioned to profit from the long-term trend of increasing chip design complexity. CFRA has a “buy” rating and $646 price target for SNPS stock, which closed at $457.95 on Feb. 25.
S&P 500 performance: 16.3% (2020), -38.5% (2008) SNPS performance: 86.2% (2020), -28.6% (2008)
Arthur J. Gallagher & Co. (AJG)
Arthur J. Gallagher is one of the world’s largest international insurance brokers and risk management service providers. Because people and businesses still need insurance even during an economic downturn, the insurance industry is generally considered to be recession resistant. Analyst Catherine Seifert says Arthur J. Gallagher has generated positive growth momentum from both pricing gains and its ongoing acquisition strategy. While the company faces execution risks tied to its acquisitions, Seifert says Arthur J. Gallagher’s superior growth outlook should support a premium valuation for the stock. CFRA has a “buy” rating and $345 price target for AJG stock, which closed at $331.83 on Feb. 25.
S&P 500 performance: 16.3% (2020), -38.5% (2008) AJG performance: 32.1% (2020), 12.6% (2008)
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Update 02/26/25: This story was published at an earlier date and has been updated with new information.
