In this article, we will be taking a look at the 11 Best Economic Recovery Stocks to Buy Now.
According to reports, the real GDP of the US increased by about 2.2% in 2025 compared to 2.8% in 2024, which indicates a gradual expansion of the American economy. Business investment and consumer spending continued to be the key forces behind this success, even if growth had slowed from the prior year. The most significant projections, which range from 1.8% to 2.0%, indicate a modest but sustained increase in 2026. This highlights the underlying resiliency of the economy and suggests a slower rate of expansion rather than a full recession.
Although there is a small dip expected, the job market is expected to remain rather tight. Unemployment is predicted to marginally rise to between 4.4% and 4.5% in 2026 after remaining around 4% in 2024 and 2025. Meanwhile, the core PCE price index, which the Fed regularly monitors, shows that inflation has continued to rise over the Fed’s 2% target. Predictions indicate that pricing pressures will gradually decrease but likely remain somewhat over target throughout 2026 due to continued cost restrictions in significant industries.
The observations of market analysts provide additional insight into the status of the economy. On January 9, Alan McKnight of Regions Wealth Management and Richard Bernstein of Richard Bernstein Advisors discussed current trends on CNBC. McKnight highlighted the tenacity of American customers and noted that if corporate profits continue on their current trajectory, the market and economy are still doing well.
Bernstein, however, emphasized that 2026 might be different from previous years and advised investors to use “boring” but reliable strategies like global diversification, dividend-paying companies, and premium stocks. McKnight cited the strong performance of international markets in 2025 as a profitable opportunity, even if he preferred local large- and mid-cap stocks and observed growing strength across nine out of ten sectors.
With that said, let’s look at the best recovery stocks.
Our Methodology
For our methodology, we focused on stocks that tend to perform well during periods of economic recovery. We screened ETFs containing cyclical stocks and narrowed our final selection to companies that have recently reported significant developments likely to influence investor sentiment. Additionally, these stocks are widely followed by analysts and favored by top hedge funds.
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).
Here is our list of the 11 best economic recovery stocks to buy now.
11. Installed Building Products, Inc. (NYSE:IBP)
Installed Building Products, Inc. (NYSE:IBP) is one of the best recovery stocks on this list.
TheFly reported on February 27 that RBC Capital increased its price target for IBP Products to $255 from $203 and maintained an Underperform rating on the stock. The firm reported that the company produced earnings for another quarter that outperformed the overall market, primarily due to robust growth in its heavy commercial segment, which management anticipates will continue to be strong in 2026.
The firm did, however, also point out some probable challenges for the upcoming year, such as pressure on prices and costs, the single-family housing market’s ongoing downturn, prospective drops in private non-residential development, and doubts about the sustainability of existing profit margins.
Installed Building Products, Inc. (NYSE:IBP) announced its financial results for the fourth quarter and the entire year that concluded on December 31, 2025, on February 26. According to the statistics, the company’s net sales for the quarter were $747.5 million, which represents a 0.4% decrease from the previous year. While other revenue from manufacturing and distribution operations increased by 22.8% to $67.8 million, installation-related revenues decreased by 2.2% to $679.7 million.
The company claims that its profitability improved despite lower revenue, with adjusted EBITDA jumping 7.7% to $142.2 million and net income rising 14.5% to a record $76.6 million. In comparison to the same period last year, earnings per diluted share increased by 18.4% to $2.83.
Installed Building Products, Inc. (NYSE:IBP) is a U.S.-based installer of insulation and complementary building products for residential and commercial construction. The company provides services such as insulation, waterproofing, fireproofing, and garage doors through a nationwide network of contractors.
10. TopBuild Corp. (NYSE:BLD)
TopBuild Corp. (NYSE:BLD) is one of the best recovery stocks.
TheFly reported on February 27 that Evercore ISI analyst Stephen Kim increased the price objective for BLD to $471, up from the previous target of $448, and reiterated an In Line rating on the stock.
TopBuild Corp. (NYSE:BLD) released its financial results for the fourth quarter and the entire year that ended on December 31, 2025, earlier on February 26. The company reported $1.49 billion in revenue for the fourth quarter, up 13.2% from the same period last year. The SPI purchase and other recently completed acquisitions were the main drivers of this development. The corporation completed seven acquisitions throughout the year, which combined generated almost $1.2 billion in sales.
The company also repurchased almost 1.4 million shares during the year and returned $434.2 million to stockholders. With acquisitions continuing to be a primary emphasis for capital deployment, the business projects that revenue in 2026 will be between $5.925 billion and $6.225 billion, and adjusted EBITDA will be between $1.005 billion and $1.155 billion.
TopBuild Corp. (NYSE:BLD) is a U.S.-based installer and distributor of insulation and building material products. The company serves residential and commercial construction markets through its nationwide network, offering installation services and distributing insulation and related building materials to contractors and builders.
9. Lennox International Inc. (NYSE:LII)
Lennox International Inc. (NYSE:LII) is one of the best recovery stocks on this list.
TheFly reported on March 5 that Oppenheimer lifted its price objective for LII to $645 from $630 and reiterated an Outperform rating on the shares. The company’s latest Investor Day presentation, according to the firm, presented an organized plan for long-term growth backed by its competitive advantages and the integration of investments in personnel capabilities, technology, and operations.
Additionally, Oppenheimer said that the company’s 2030 financial targets seem doable with potential for growth. The company claims that continued digital and artificial intelligence initiatives, new product launches, and effective channel execution might provide further drivers for revenue growth and margin expansion beyond current projections.
In a recent move, Lennox International Inc. (NYSE:LII) and Ariston Group formed a joint venture on March 3 to formally enter the North American residential water heating market. By combining Ariston’s knowledge of water heating technology with LII’s well-established dealer network in the US and Canada, this cooperation gives homeowners a new option for dependable, effective, and high-performance water heating solutions.
The company offers products with increased functionality and durability, such as features that improve safety, lower corrosion and silt buildup, and increase energy efficiency. Additionally, LII’s water heaters are integrated with smart home systems, giving homeowners the ability to monitor and adjust comfort and heating settings via a linked platform.
Lennox International Inc. (NYSE:LII) designs, manufactures, and sells heating, ventilation, and air conditioning (HVAC) systems for residential and commercial markets worldwide, providing energy-efficient climate control solutions and related products to contractors, distributors, and end-users.
8. Toll Brothers, Inc. (NYSE:TOL)
Toll Brothers, Inc. (NYSE:TOL) is also one of the best economic recovery stocks to buy now.
TheFly reported on March 3 that Truist Securities began coverage of TOL, assigning a Buy rating and setting a price target of $190. The firm stated that lower revenue and slight drops in homebuilding units are anticipated in 2026, along with possible pressure on prices.
According to Truist, 2026 was a year of declining margins and demand, which could lead to notable increases in earnings in 2027. Truist emphasized Toll Brothers’ excellent location to profit from any early indications of revival in the luxury home market next year, and the company is thought to be cheap in relation to its projected return on equity.
In addition, Toll Brothers, Inc. (NYSE:TOL) released its fiscal 2026 first quarter results, which concluded on January 31, on February 17. The company’s net income increased from $177.7 million and $1.75 in the previous year’s quarter to $210.9 million, or $2.19 per diluted share. $1.85 billion was made from home sales, while $2.38 billion was the net signed contract value. There were 5,051 properties in the $6.02 billion backlog.
Furthermore, the company recorded a gross margin of 24.8% and an adjusted margin of 26.5% for home sales. With $2.20 billion available under its revolving credit arrangement, there was $1.20 billion in cash on hand. The company sold half of its Apartment Living portfolio and repurchased 0.3 million shares.
Toll Brothers, Inc. (NYSE:TOL) is a U.S.-based luxury homebuilder specializing in designing, constructing, and selling high-end residential homes and communities nationwide, focusing on quality craftsmanship, custom features, and premium living experiences for affluent buyers.
7. Williams-Sonoma, Inc. (NYSE:WSM)
Williams-Sonoma, Inc. (NYSE:WSM) is one of the best recovery stocks.
TheFly reported on March 6 that Citi increased its price target for WSM to $208 from $188 and kept a Neutral rating on the stock. The firm anticipates that the company will report fourth-quarter earnings slightly above market expectations when results are released on March 18.
Furthermore, in a strategic move, Williams-Sonoma, Inc. (NYSE:WSM)’s GreenRow launched its first physical location in the SoHo neighborhood of New York City on March 6, signifying the company’s transition from a digital-only platform to a multichannel retailer. Customers may interact with GreenRow’s sustainable, carefully designed furniture, textiles, lighting, and décor in an immersive setting at the new location at 47 Howard Street, which is designed to resemble a lived-in house.
The store offers a few unique and artisanal pieces while highlighting the brand’s emphasis on durable, eco-friendly materials, such as FSC-certified wood and fabrics obtained ethically. The launch offers a chance to highlight GreenRow’s dedication to sustainability, design, and quality. It also takes place during a big opening weekend with in-person events and a percentage of the proceeds going to the New York Botanical Garden.
Williams-Sonoma, Inc. (NYSE:WSM) is a U.S.-based retailer offering premium kitchenware, home furnishings, and decor through brands like Williams-Sonoma, Pottery Barn, and West Elm, combining e-commerce and physical stores to deliver high-quality products and lifestyle solutions to consumers.
6. Casey’s General Stores, Inc. (NASDAQ:CASY)
Casey’s General Stores, Inc. (NASDAQ:CASY) is one of the best recovery stocks.
TheFly reported on March 5 that BMO Capital increased its price target for CASY to $700 from $540 and maintained a Market Perform rating on the shares. The firm noted that industry data points to a strong finish for both in-store and fuel sales at convenience stores, suggesting that overall trends in the sector could return to growth in 2026 following two years of relative stabilization.
Separately, on March 4, Casey’s General Stores, Inc. (NASDAQ:CASY) launched its annual campaign to combat hunger in partnership with DoorDash and Feeding America. The initiative aims to provide 10 million meals to local Feeding America food banks across Casey’s communities.
Guests can participate by rounding up in-store purchases, adding donations to online orders, or placing CASY’s deliveries through DoorDash, which contributes the value of one meal per order (up to 300,000 meals). The program supports 61 regional food banks, helping address food insecurity in the rural areas and neighborhoods that CASY serves, while continuing the company’s long-standing commitment to giving back to its communities.
Casey’s General Stores, Inc. (NASDAQ:CASY) operates a network of convenience stores across the U.S., offering fuel, groceries, prepared foods, and other everyday essentials, focusing on convenience, community presence, and customer service in small-town and suburban markets.
5. Victoria’s Secret & Co. (NYSE:VSCO)
Victoria’s Secret & Co. (NYSE:VSCO) is one of the best economic recovery stocks to buy now.
TheFly reported on March 6 that BofA Securities raised its price target for VSCO to $58 from $52 and kept a Neutral rating on the shares. Although recent sales trends are encouraging, the firm warned that continued investments to support growth may put pressure on margins in the near future. The company also raised its earnings-per-share forecasts for fiscal 2026 and 2027 to $3.39 and $3.61, respectively, in accordance with higher expectations for sales and gross profit, indicating a better outlook for the company’s revenue and profitability.
Victoria’s Secret & Co. (NYSE:VSCO) already announced its financial results for the fourth quarter and the entire fiscal year 2025, which ended on January 31, 2026, on March 5. With adjusted net income of $238 million, or $2.77 per diluted share, the company reported fourth-quarter net sales of $2.27 billion, an 8% rise over the previous year.
The company also reported adjusted net income of $250 million, or $3.00 per diluted share, and net sales of $6.553 billion for the entire year, up 5%. With a focus on operational discipline, margin growth, and the effective implementation of its Path to Potential strategy, leadership demonstrated outstanding performance across brands, channels, and geographies, setting up the business for sustained profitable growth into fiscal 2026.
Victoria’s Secret & Co. (NYSE:VSCO) is a U.S.-based retailer specializing in lingerie, apparel, and beauty products for women, offering fashion-forward designs through stores, e-commerce, and direct marketing while focusing on brand appeal, style, and customer experience.
4. Dollar General Corporation (NYSE:DG)
Dollar General Corporation (NYSE:DG) is among the best recovery stocks on this list.
TheFly reported on March 6 that Piper Sandler increased its price target for DG to $132 from $129 and kept a Neutral rating on the shares. Even though DG had a strong fourth quarter, the firm pointed out that growing oil costs would put pressure on consumer spending. Comparable outcomes are anticipated to be more difficult in 2026, and the company’s present valuation of 21 times earnings is getting close to a five-year high, which has led the company to be cautious despite recent performance.
Separately, earlier on February 17, Dollar General Corporation (NYSE:DG) launched its True Living Air Care Collection, a private-label line of home fragrance products designed to be affordable and high-quality. It is Available in stores nationwide and the assortment includes over 30 items such as 8 oz. candles, candle two-packs, wax melts, and air/fabric refresher sprays, all priced at $5 or less.
The collection offers 12 scents inspired by customer preferences, ranging from fresh florals and fruits to warm, cozy blends. Reflecting the company’s commitment to value and quality, the line is backed by a 100% satisfaction guarantee and is also accessible through myDG Delivery via the retailer’s app and website.
Dollar General Corporation (NYSE:DG) is a U.S.-based discount retailer operating thousands of stores nationwide, offering a wide range of everyday essentials, including groceries, household items, and personal care products, with a focus on convenience, low prices, and accessibility in rural and urban communities.
3. The TJX Companies, Inc. (NYSE:TJX)
The TJX Companies, Inc. (NYSE:TJX) is one of the best recovery stocks on this list.
TheFly reported on February 26 that BofA increased its price target for The TJX to $175 from $168 and retained a Buy rating on the shares. The firm reported a good start to the first quarter, gave preliminary forecasts for fiscal 2027, and emphasized that TJX outperformed expectations on both sales and profitability. BofA expressed confidence in the company’s continued operating success and growth prospects in the retail sector, noting that it is likely to continue gaining market share from current clients and profit from trade-down trends.
Furthermore, on March 4, The TJX Companies, Inc. (NYSE:TJX) revealed in a regulatory filing that CEO Ernie Herrman sold 30,000 shares of the company’s common stock for a total of $4.83 million.
On February 25, TJX also released impressive FY26 numbers, including net sales of $60.4 billion, up 7%, and diluted EPS of $4.87, up 14%. Net revenues increased 9% to $17.7 billion in Q4, with an EPS of $1.58. Consolidated comparable sales increased 5% for both Q4 and FY26, and adjusted statistics exceeded projections. In addition to announcing plans to increase dividends by 13% and repurchase $2.50–$2.75 billion in stock in FY27, the business returned $4.3 billion to stockholders through buybacks and dividends.
The TJX Companies, Inc. (NYSE:TJX) is a U.S.-based off-price retailer operating brands like T.J. Maxx, Marshalls, and HomeGoods, offering branded apparel, home goods, and accessories at discounted prices through a combination of physical stores and e-commerce.
2. Costco Wholesale Corporation (NASDAQ:COST)
Costco Wholesale Corporation (NASDAQ:COST) is among the best recovery stocks.
TheFly reported on March 6 that BMO Capital increased its price target on COST to $1,315 from $1,175 and kept an Outperform rating. In a retail environment characterized by operational volatility and variable turnarounds, the firm emphasized the company’s robust Q4 results and pointed out that its steady performance in Q2 strengthens COST’s position as a dependable core holding.
Costco Wholesale Corporation (NASDAQ:COST) released its operating results for the first 24 weeks of the fiscal year, which concluded on February 15, 2026, and the second quarter of fiscal 2026 on March 5. According to the statistics, the company’s first 24-week net sales jumped 8.7% to $134.22 billion, while its quarterly net sales increased 9.1% to $68.24 billion from $62.53 billion in the previous year.
The company stated that its net income for the quarter was $2.035 billion, or $4.58 per diluted share, as opposed to $1.788 billion, or $4.02 per diluted share, in the previous year. Net income increased from $3.59 billion, or $8.06 per diluted share, to $4.04 billion, or $9.08 per diluted share, for the first 24 weeks. The company supports e-commerce activities in several nations and runs 924 warehouses worldwide, ensuring ongoing expansion in both physical and online channels.
Costco Wholesale Corporation (NASDAQ:COST) is a U.S.-based membership warehouse retailer offering bulk groceries, electronics, apparel, and household goods at low prices. The company operates large-format warehouses worldwide, emphasizing value, efficiency, and a membership-based shopping experience.
1. The Walt Disney Company (NYSE:DIS)
The Walt Disney Company (NYSE:DIS) is one of the best recovery stocks.
TheFly reported on March 8 that DIS’s Pixar released its new animated feature Hoppers, which debuted as the top-grossing film across the U.S. and Canada with an estimated $46 million in ticket sales. This opening represents the strongest launch for a brand-new set of Pixar characters since Coco premiered in 2017, which earned $50.8 million during its debut. The film’s performance underscores Pixar’s continued appeal in the animation market, demonstrating strong audience interest in original stories and new characters while contributing significantly to Disney’s domestic box office results in early March.
Earlier on February 24, The Walt Disney Company (NYSE:DIS) announced that Kristina Schake, Senior Executive Vice President and Chief Communications Officer, will leave the company after March 18, 2026, aligning with the conclusion of Bob Iger’s tenure as CEO. Since joining Disney in 2022, Schake has been a key member of senior management, advising the CEO and Board while shaping communications strategies, advancing strategic priorities, and guiding the company through major initiatives. Her leadership has strengthened stakeholder engagement and clarity during a transformative period. Disney will name her successor in the future, as the company acknowledges Schake’s lasting contributions to its operations, reputation, and strategic execution.
The Walt Disney Company (NYSE:DIS) is a U.S.-based entertainment giant, producing films, TV shows, and digital content while operating theme parks, resorts, and media networks worldwide, delivering storytelling, family entertainment, and immersive experiences across multiple platforms.
While we acknowledge the potential of DIS as one of the low price high volume stocks to buy right now, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DIS and that has 100x upside potential, check out our report about this cheapest AI stock.
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