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Macroeconomic uncertainty has UBS coining a new investing acronym and eyeing retail stocks that it says could continue to outperform. The investment bank recommends sticking with Costco Wholesale , O’Reilly Automotive and Walmart — what the firm calls “COW” stocks — saying they’ve already had a strong start to the year and are poised to continue beating the broader market in any economic climate. “During times of uncertainty, we think owning the stocks of best-in-class retailers could provide a measure of safety,” analyst Michael Lasser wrote in a note on Tuesday. “We believe these are among a few retailers well-positioned with a clear path to upward earnings estimate revisions in this environment.” UBS also noted that all three retail stocks have ample upside if the macro picture improves, giving investors both defensive protection as well as potential growth. President Donald Trump’s efforts to reshape U.S. trade policy have stoked market volatility and fears that the U.S. economy could slow down and possibly enter a recession, hurt by dampened consumer spending and a pickup in inflation. Those concerns have eased since April , after the White House delayed implementing its higher proposed tariffs until early July. “These retailers also should see an accelerated upswing as the backdrop improves,” Lasser said. “This is because they tend to benefit from periods of disruption and come out stronger on the other side of it. Plus, each of these retailers has unique drivers that can help them succeed in various macro backdrops, driving sustainable sales growth and market share gains.” All three stocks have outperformed the broader market in 2025. Shares of O’Reilly are 14% higher so far this year. Costco is ahead 9% and Walmart by 4%, while the S & P 500 so far this year through Tuesday, while the S & P 500 has gained less than 3%. Lasser specifically highlighted Costco’s loyal membership base, which he said should continue to drive sales. He also lauded O’Reilly’s efforts to open stores in urban and rural areas, saying they’re helpful in making speedy deliveries. Lasser praised Walmart’s scale and network, as well as its e-commerce segment. “Importantly, we believe these retailers have advantages that will be very difficult for competitors to replicate,” he said.
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