Retail stocks that have strong membership numbers and retention rates are ideal candidates to hold as recession fears grow, according to Bernstein. “We generally view the likes of Amazon , Walmart and Costco as the best positioned to ride a macro storm given the combination of a defensive category mix, relative value and membership lock-in that comes with each platform,” Bernstein analyst Nikhil Devnani said in a note to clients on Tuesday. The Bernstein report landed the same day as consumer confidence in where the economy is headed touched a 12-year low, the Conference Board said. That followed a recent University of Michigan Survey of Consumers for March falling to its lowest reading since 2022 . The weakening growth outlook is also being frustrated by President Donald Trump’s tariff push. The president is expected to follow through with his previously announced reciprocal tariffs on April 2, which are aimed at countries that impose duties on U.S. imports. Reports Sunday from The Wall Street Journal and Bloomberg News said Trump may end up narrowing the scope of the tariffs, and exclude some industry-specific duties altogether. Because of the mounting macroeconomic uncertainty, Devnani said both gross merchandise value and membership loyalty are the differentiating factors in e-commerce, with Amazon and Walmart seemingly engaged in a race to secure dominance. Earlier this year, Amazon surpassed Walmart in quarterly revenue for the first time ever. Costco has historically been a go-to for staples in times of economic uncertainty. The company focuses on passing along savings to shoppers, and leans heavily on selling memberships for added revenue. Costco CEO Ron Vachris said on its fiscal second-quarter earnings call in early March that one of the company’s responses to tariffs is to limit price increases on already burdened shoppers. Bernstein reiterated an outperform rating on all three stocks. The firm’s $275 per share price target on Amazon implies about 35% upside from its $203.26 close on Monday, while Bernstein’s $113 per share price target on Walmart calls for about 29% upside from its $87.49 close. Amazon stock has slipped more than 6% so far this year, while Walmart is down about 5%. On Costco, Bernstein’s $1,177 price target calls for more than 27% upside ahead. The membership-based wholesaler is higher by about 1% this year. To be sure, Devnani said that Bernstein’s view of the entire e-commerce segment is cautious, given that a sample basket of stocks in the sector has pulled back roughly 15% since the February highs. “We continue to live week to week with these stocks as investors try to discern the degree to which the macro backdrop may be shifting, or if these concerns can blow over,” Devnani said. COST WMT,AMZN 1Y mountain Costco vs Walmart and Amazon over the past year.
