Look, I get it. Tax season usually means one thing: frantically searching for receipts you definitely threw away and wondering if that coffee with your cousin counts as a business expense. But this year, Bank of America analysts are basically saying your refund check could be your ticket to some solid stock picks. And honestly? They might be onto something.
Here’s the deal: BofA thinks Americans are about to get a $140 billion economic boost from tax refunds and smaller tax bills. That’s not chump change – we’re talking an average of $1,000 extra per family, thanks to things like the SALT cap changes and no taxes on overtime or tips. (Finally, something good came out of all that political noise.)
But here’s where it gets interesting for us stock nerds. BofA’s retail analyst Robert Ohmes has identified two categories of stocks that are basically positioned to catch this wave of consumer cash like a surfer catching the perfect wave.
The “Value Retail” Squad
First up, we’ve got the value retailers – basically the stores where people go when they want to stretch their dollars. Think Dollar General (up 11% this year already), Academy Sports and Outdoors (crushing it at +17%), and the auto parts kings O’Reilly Automotive (+7%) and AutoZone (+9%). There’s also National Vision Holdings (+5%) for when you need new glasses but don’t want to sell a kidney.
The logic here is pretty straightforward: when lower and middle-income folks get their refund checks, they’re not booking trips to Cabo. They’re buying groceries, paying down debt, and picking up those necessities they’ve been putting off. It’s not glamorous, but it’s profitable.
The “Broadline” Heavy Hitters
Then we have the broadline retailers – fancy analyst speak for “stores that sell everything.” The stars here are Walmart (up 15% and just hit a cool $1 trillion valuation) and Costco (+14%). These giants are positioned to benefit from higher-income households who are getting bigger refunds and have more discretionary spending power.
Plus, both companies are doubling down on same-day delivery and e-commerce, which means they’re not just riding the tax refund wave – they’re building the infrastructure to keep riding it long-term. Ohmes even thinks Best Buy could get a boost as people splurge on consumer electronics with their refund money.
The Bottom Line
Look, nobody’s saying to YOLO your entire portfolio into retail stocks because of tax season. But if you’re looking for companies that could benefit from Americans having a little extra cash in their pockets, these eight picks aren’t the worst place to start your research.
Just remember: past performance doesn’t guarantee future results, tax refunds aren’t guaranteed to boost spending, and I’m definitely not your financial advisor. But hey, at least now you know where some smart Wall Street analysts are placing their bets.