Why are consumer staples stocks performing so well in early 2026?

Consumer staples stocks are having their strongest start to the year in at least 25 years, outperforming the broader market due to investors rotating into defensive sectors amidst changing growth and inflation expectations.

What factors are contributing to the expected durable recovery in consumer staples?

Analysts expect a durable recovery as historically challenging factors like elevated input costs, shifting consumer behavior, and volume pressures are beginning to ease, setting the stage for sustained improvement.

Which specific areas within consumer staples are analysts most interested in for 2026?

Wells Fargo highlights the household and personal care segment, with overweight ratings on Church & Dwight, Procter & Gamble, and Edgewell Personal Care. Beverage stocks, particularly beer companies like Constellation Brands and Anheuser-Busch InBev, are also identified as attractive recovery trades.

Home / Business and Economy / Consumer Staples Surge: Best Start in 25 Years

Consumer Staples Surge: Best Start in 25 Years

27 Jan

•

Summary

Consumer staples stocks show their strongest yearly start in at least 25 years.
Sector performance outpaces the S&P 500 by over 500 basis points.
Analysts predict a durable recovery as headwinds ease in 2026.

Consumer Staples Surge: Best Start in 25 Years

Consumer staples are off to their strongest start to a year in at least a quarter century, significantly outperforming the broader market. This surge reflects a rotation into defensive equities amid evolving growth and inflation expectations.

Wells Fargo analysts indicate this rally is more than a short-term defensive play. The sector's prior struggles were fundamentally driven by input costs, consumer behavior shifts, and volume pressures. As these forces ease heading into 2026, a more sustainable recovery is anticipated if improvement rates persist. Valuations are considered low, suggesting the upward trend could continue.

The household and personal care segment shows promise, though clearer data is needed. Within this area, Church & Dwight, Procter & Gamble, and Edgewell Personal Care are rated favorably. Beverage stocks, especially beer companies like Constellation Brands and Anheuser-Busch InBev, are flagged as attractive recovery trades with sustained potential through summer.