In this article, we will examine the consumer defensive stocks to buy, as recommended by analysts.
During market volatility, consumer defensive stocks serve as lifeboats, providing a safe harbor for investors. These companies offer essential goods and services that the market needs, regardless of the conditions. Analysts and research firms are closely monitoring this space, identifying companies that not only have defensive characteristics but also exhibit growth potential.
On December 5, Schwab Center for Financial Research published “Sector Views: Monthly Stock Sector Outlook,” analyzing the 11 S&P 500 equity sectors. While the entity upgraded its six- to 12-month outlook on Communication Services, Industrials, and Health Care to Outperform, it downgraded Consumer Discretionary, Real Estate, and Utilities to Underperform. The research firm bases its view on pockets of consumer stress, particularly among lower-income consumers, and on challenging fundamentals. However, they maintained their Market Perform view on Consumer Staples.
Later on December 8, Morningstar’s chief US market strategist, David Sekera, published an article titled “December 2025 US Stock Market Outlook: Where We See Investment Opportunities.” He highlighted that the consumer defensive, utility, industrial, and financial services sectors remain overvalued. While he noted that the overall consumer defensive valuation premium has increased to 11% as of the end of November, the overvaluation is primarily in Walmart and Costco, with other food and packaged goods stocks significantly undervalued.
Keeping this in mind, we have compiled a list of consumer defensive stocks to buy according to analysts. These stocks belong to companies that combine durability with upside potential.
Nejron Photo/Shutterstock.com
Our Methodology
For this article, we filtered for stocks in the Consumer Defensive sector with a market capitalisation exceeding $2 billion. We then shortlisted the top eleven companies with over 20% upside potential and ranked them in ascending order. We also included data on hedge fund holdings in these companies based on Insider Monkey’s database, as of Q3 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ)
Upside Potential as of December 12, 2025: 23.44%
Number of Hedge Fund Holders: 37
As of December 12, BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) has a ‘Buy’ or equivalent rating from slightly more than half the analysts covering the stock. While the target price ranges from $90 to $139, the median price target of $115 reflects an upside potential of 23.44%. Among the 40% analysts recommending holding the stock is Chris Graja, an analyst at Argus Research, who maintained the ‘Hold’ rating on BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) on December 5.
Earlier on November 21, BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) reported its third-quarter results, delivering revenue in line with the estimates and earnings $0.06 above guidance. Overall, the company demonstrated resilience in a challenging retail environment, with net sales up 4.8% year over year. With a focus on value and digital innovation, the company remains committed to driving consumer engagement.
Keeping this performance in mind, several analysts revised their outlook. On November 24, TheFly reported that UBS cut BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) to $120 from $125, with an unchanged ‘Buy’ rating. Similarly, Baird reduced the company’s price target to $115 from $130 and kept an ‘Outperform’ rating. According to TheFly, the firm “updated its model following Q3 results.”
BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) is a Massachusetts-based company operating membership warehouse clubs in the eastern United States. Founded in 1984, the company offers its products through its clubs, the BJs.com website, and its mobile app.
9. Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI)
Upside Potential as of December 12, 2025: 23.78%
Number of Hedge Fund Holders: 38
On December 12, RBC outlined its “Top Retail Stocks for 2026,” naming Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) as one of its preferred stocks. According to the firm, the company is poised to greatly benefit from next year’s anticipated economic conditions, including low-income consumer pressure and retail media/AI driving industry consolidation.
Looking ahead to 2026, RBC expects Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) to expand its footprint with roughly 75 new stores, drive healthy gross margin improvement through a better supply chain, and benefit from cycling past expenses.
Separately, on December 11, Citi trimmed the price target on Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) to $141 from $150, while maintaining a ‘Buy’ rating, following the earnings report. On the other hand, Craig-Hallum lifted the price target on the company to $157.00 from $156.00 and kept a ‘Buy’ rating on December 10. The firm highlighted the company’s robust third-quarter results and raised full-year guidance.
Overall, Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) has a ‘Buy’ or equivalent rating from 63% of analysts covering the stock, with the remaining recommending holding the stock, as of December 12. With a median price target of $141, the stock has 23.78% upside.
Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) is a Pennsylvania-based retailer of closeout merchandise and excess inventory. Incorporated in 1982, the company has a mission to “sell Good Stuff Cheap.”
