U.S. consumer sector posted its best start to the year in 25 years. What is Wells Fargo betting on?

U.S. consumer staples stocks are off to their strongest start to the year in at least the last quarter century, leaving behind a broad index of U.S. equities. Wells Fargo believes the rally is not limited to simple capital flows into defensive assets and names the most attractive securities in the sector.

The S&P 500 Consumer Staples sector index is up nearly 7% since the start of 2026, outperforming the S&P 500 by more than 500 basis points. That's the best relative sector performance versus the broad market index for this period of the year in at least the past 25 years, CNBC reported, citing Wells Fargo.

Analysts at one of Wall Street's largest banks believe that the current rally is not limited to a short-term "flight to quality." The sector's drawdown in 2023-2025 was driven by fundamental factors such as high input costs and pressure on sales volumes, but at the 2026 threshold, the impact of these negative trends began to fade, Wells Fargo noted.

"Valuation estimates [for stocks] are relatively low. The movement [upward] may continue as long as the current dynamics of changes persist," the Wells Fargo review says. The bank considers February as the key month for confirmation of the positive trend stability.

Wells Fargo considers the shares of manufacturers of household and personal care products attractive. The bank assigned an "above market" rating (Overweight, consistent with a buy recommendation) to Church & Dwight, Procter & Gamble and Edgewell Personal Care.

According to Wells Fargo strategists, beverage producers can show the most stable dynamics until the summer. They named shares of brewing companies Constellation Brands and Anheuser-Busch InBev as the most attractive assets for betting on recovery.

According to FactSet, the Wall Street favorite in this top five is Anheuser-Busch InBev shares - with a consensus "buy" (Buy) and a complete lack of recommendations to sell. Analysts consider Procter & Gamble and Edgewell Personal Care slightly less attractive - their average rating is "above market" (Overweight), and none of the experts advises to get rid of these assets. The majority considers Constellation Brands shares undervalued, but two analysts advise to sell them (Sell and Underweight ratings). Wall Street is the most reserved in its assessment of Church & Dwight's potential: it is the only issuer in the top five with a neutral consensus (Hold).

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