Evercore ISI picks six stocks to play the small-cap rally better

Evercore ISI has recommended six stocks to help investors to play the small-cap rally better than a simple bet on the Russell 2000 index. The investment bank screened for small caps that are in the highest quintile of profitability based on net profit margins and return on equity, as well as those in the top quintile of sentiment based on the change in analysts’ revenue and earnings estimates in the past three months. In addition, all of the Evercore ISI picks are able to raise prices to offset tariff-related costs and protect their profit margins.

Enova International: The digital lender's shares, since the start of 2025, have lost 2.7%. Meanwhile, Wall Street analysts see nearly 36% upside versus current quotes, at an average target price of $126.50 per share. The stock has seven "buy" recommendations and only one "hold" recommendation, according to MarketWatch.  

Commvault Systems: The data protection software provider has seen its shares rise 22% year to date, and seven of the 12 analysts who track the company rate the stock as a "buy" (the other five have it as a "hold"). Their average target price of $189.43 per share implies upside of 2.6%. 

Cal-Maine Foods: Shares of the egg producer have dropped more than 6% since the beginning of the year, after soaring in January amid rising egg prices because of bird flu. Barron's writes that the stock now looks cheap and poised for growth. In contrast, Wall Street analysts see Cal-Maine as a "hold" at an average target price of $97.00 per share, just above current quotes. 

Brinker International: Shares in the owner of Chili's restaurant chain, since the beginning of the year, have jumped almost 32%. Against this backdrop, most coverage analysts advise neither to buy nor to sell the stock: 15 "holds" versus five "buys." Their average target price of $165.80 per share is below current quotes. 

National Beverage: The maker of LaCroix sparkling water has added 5% in market value since January 1. Wall Street is lukewarm on the stock, with one analyst rating it a "hold," and one a "sell." Their average target price is $42.00 per share, below the stock's closing price on Friday, June 13.

Cohen & Steers: The real estate investment firm has lost more than 18% of its market value since the beginning of the year, to $75.67 per share. Its limited Wall Street coverage is split: One analyst recommends clients buy the stock, while another has it as a "hold." Their average target price of $81.00 per share offers upside of 7%.

Although small caps have bounced back after the selling off in April, with the Russell 2000 adding 22% from its April low, their upside looks limited in the long term, Barron's notes.

“In our book, U.S. small-caps are now an occasional tactical trade while large-caps are a core holding,” argues Nicholas Colas, cofounder of DataTrek Research, as quoted in the article.