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Wall Street analysts say these stocks present a buying opportunity if the US enters a recession

Key Points
  • CNBC examined the most recent Wall Street research to find stocks that analysts like in a recession.
  • Top picks in a recession include: Matson, Planet Fitness, TJX Cos., National Vision Holdings and AquaVenture Limited Holdings.
A shopper carries a bag outside a TJ Maxx store in New York, U.S.
Victor J. Blue | Bloomberg | Getty Images

Wall Street analysts say there's plenty of value to be found if a downturn were to hit the economy.

CNBC examined the most recent Wall Street research to find top picks by analysts in a recessionary environment.

They include names such as Matson, Planet Fitness, TJX Cos., National Vision Holdings and AquaVenture Limited Holdings.

The yield on the benchmark 10-year Treasury note has repeatedly broken below the 2-year rate since Aug.14, an odd bond market phenomenon that historically preceded recessions. But analysts say that even if a recession were to happen, there's a still wide range of options to bolster your portfolio.

Planet Fitness recently reported earnings that were better than many expected and analysts at Jefferies continue to compare the company to Amazon, calling it "Amazonian."

The fitness center operator should benefit from its defensive qualities, they said. The firm called the company "recession resistant," and added Planet Fitness would also benefit from its lack of China exposure.

"The $10 price point makes it unlikely for people to cancel," analyst Randal Konik told CNBC.

The stock is down 3% over the last week.

Retail is an area that analysts generally agree would be hurt by tariffs and an economic downturn as many of their goods are imported from China.

But analysts at Wedbush consider what's known as the "off-price" sector to generally be more resistant to economic instability. The "off-price" sector includes companies such as Ross Stores and T.J. Maxx.

"We continue to look upon the off-price sector as an area of strength in markets troubled by tariff concerns with flexible business models resilient to cost passthroughs, and as e-commerce can't replace the off-price experience of bargain hunting in stores," they said.

Shares of TJX are up over 3% over the last week.

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Another recession friendly stock is ocean freight shipper Matson, analysts at Seaport Global say. The company provides shipping services in the Pacific as well as to and from the Hawaiian Islands.

Matson made a key acquisition three years ago of another shipper in Alaska, which has helped the company gain market share and revenue and in turn could help soften the blow in the event of an economic downturn.

"We believe that the addition of Span Alaska gives the company some cushion to a downturn or recession that they did not have when they were part of Alexander and Baldwin during the great recession in 2008-2009," Seaport Global analyst Kevin Sterling said.

The firm says that in a recession, many customers would seek a cheaper method of freight shipping, giving Matson additional business.

"If a recession were to occur, we typically see shippers trade down to a deferred airfreight service from a premium or express service (to save money), thus Matson could potentially pick-up business if customers trade down from air," they said.

The stock is down 4% over the last week.

Here's what stocks analysts like in an economic downturn:

Seaport - Matson, buy rating

"We also believe that Matson is well positioned and more diversified because of the growth of logistics, in particular Span Alaska, to better withstand a recession than in previous years. ... We believe that the addition of Span Alaska (which Matson acquired three years ago) gives the company some cushion to a downturn or recession that they did not have when they were part of Alexander and Baldwin during the great recession in 2008-2009. ... If a recession were to occur, we typically see shippers trade down to a deferred airfreight service from a premium or express service (to save money), thus Matson could potentially pick-up business if customers trade down from air."

According to TipRanks, Matson holds a SmartScore rating of 4 which gives it an overall neutral consensus. This is based on various factors such as hedge fund sentiment and insider activity.

Jefferies - Planet Fitness, buy rating

"Continued Share Gains, High Margins, and Accelerating Free Cash Flow. PLNT shares should continue to benefit from rising multiple and earnings increases. In addition, it should benefit from its defensive qualities (e.g. no China exposure and recession resistant). ... We continue to view this story as one of the best in the market ... it's Amazonian both literally and figuratively."

According to TipRanks, Planet Fitness is a strong buy consensus with an average analyst price target of $83 (24% upside potential).

Wedbush - TJX Cos., neutral rating

"We continue to look upon the off-price sector as an area of strength in markets troubled by tariff concerns with flexible business models resilient to cost passthroughs, and as e-commerce can't replace the off-price experience of bargain hunting in stores. Likewise, diverse assortments drive high sourcing and warehousing costs making off-price profitability difficult to replicate online, and off-price shares are often perceived as a step removed from U.S. trade tensions as well as recession proof."

According to TipRanks, TJX Cos. is a moderate buy consensus with an average analyst price target of $57 (11% upside potential).

RBC - AquaVenture Limited Holdings, outperform rating

"By closing out a choppy Multi-Industry earnings season roiled by short-cycle industrial weakness and trade war skirmishes, AquaVenture's healthy 2Q19 beat & raise further spotlighted why this high-end water pure-play should be viewed as a defensive safe harbor insulated from the industrial cycle."

According to TipRanks, Aquaventure Holdings is a strong buy consensus with an average analyst price target of $28 (58% upside potential).

Wells Fargo - National Vision Holdings, outperform rating

"We remain constructive on EYE's strong customer value proposition, relatively low tariff exposure, recession resistant model (70 consecutive quarters of positive comps), and ample LT growth levers (new store openings, share gains, existing store maturity)."

According to TipRanks, National Vision Holdings is a strong buy consensus with an average analyst price target of $36 (31% upside potential).