Elevated interest rates, slumping economic growth and a trade war have some investors concerned a recession may be around the corner. When the economy tanks, even most high-quality stocks get dragged down with it.
[Sign up for stock news with our Invested newsletter.]
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 Potential From May 19 Close |
| Walmart Inc. (ticker: WMT) | 19.2% |
| Netflix Inc. (NFLX) | 8.1% |
| T-Mobile US Inc. (TMUS) | 10.5% |
| Accenture PLC (ACN) | 28.1% |
| NextEra Energy Inc. (NEE) | 8.3% |
| Synopsys Inc. (SNPS) | 10.1% |
| Arthur J. Gallagher & Co. (AJG) | 10.5% |
Walmart Inc. (WMT)
It’s no surprise that discount retailer Walmart outperformed during each of the past two recessions. 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 is generating impressive revenue growth in its Walmart U.S., international and Sam’s Club segments. Sundaram says Walmart can leverage automation technology, advertising, membership fees, data analytics, fulfillment services and other profit drivers to continue to expand its operating margins over the next several years. CFRA has a “buy” rating and $117 price target for WMT stock, which closed at $98.12 on May 19.
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 growing its global first-mover advantage while competing U.S. streaming services have only recently become profitable. CFRA has a “strong buy” rating and $1,289 price target for NFLX stock, which closed at $1,191.64 on May 19.
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 telecom competition is fierce, but T-Mobile will likely continue to gain market share from leading competitors. He says the company’s cash flow and churn trends are bullish, and T-Mobile beat Verizon Communications Inc. (VZ) and AT&T Inc. (T) with its 5G network rollout. Snyder says next-generation devices and simplified pricing plans will be growth drivers for T-Mobile. CFRA has a “strong buy” rating and $270 price target for TMUS stock, which closed at $244.25 on May 19.
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 early artificial intelligence technology makes the company a leader in the IT services market. Its generative AI features are already fueling bookings momentum and industry-leading sales growth. CFRA has a “strong buy” rating and $409 price target for ACN stock, which closed at $319.39 on May 19.
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, as well as 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 demand, predictable cash flows and limited competition. Analyst Daniel Rich says NextEra has a strong balance sheet and a compelling earnings growth outlook for the next several years. CFRA has a “buy” rating and $80 price target for NEE stock, which closed at $73.86 on May 19.
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 Synopsys’ electronic design automation (EDA) and its design intellectual property segments both have sustainable growth profiles. About 77% of Synopsys’ revenue is recurring, providing exceptional financial visibility. Idlet says Synopsys is the market leader in EDA and the top design IP supplier for advanced foundries. CFRA has a “buy” rating and $568 price target for SNPS stock, which closed at $516.01 on May 19.
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 impressive growth momentum, fueled in part by its acquisition strategy. High domestic market exposure also insulates the company from U.S. dollar weakness. While the stock trades at a premium valuation, Seifert says its revenue growth rate suggests more outperformance ahead. CFRA has a “buy” rating and $380 price target for AJG stock, which closed at $343.82 on May 19.
S&P 500 performance: 16.3% (2020), -38.5% (2008) AJG performance: 32.1% (2020), 12.6% (2008)
More from U.S. News
10 Stocks Warren Buffett Just Bought and Sold
9 Best Cheap Stocks to Buy Under $10
9 Best Tariff-Resistant Stocks to Buy
7 Stocks That Outperform in a Recession originally appeared on usnews.com
Update 05/20/25: This story was published at an earlier date and has been updated with new information.
