3 Stocks to Buy and Hold Even if There's a Stock Market Sell-Off This Fall

The article identifies Costco, Walmart, and Unilever as defensive consumer-staples and value-retail holdings positioned to withstand market sell-offs. Walmart reported 26% enterprise e-commerce growth, with automated facilities handling roughly 50% of U.S. e-commerce fulfillment and more than 60% of store freight, while higher-margin membership, marketplace, and advertising businesses contribute about one-third of operating income. Unilever posted 4.8% first-half volume-led sales growth, including 6% underlying growth from Power Brands and more than 7% in home care, alongside a planned 2026 foods combination with McCormick and ongoing dividends and buybacks. Costco is expanding by roughly two dozen net warehouses this year and benefits from its membership model, essential-product mix, and scale-driven purchasing power.

Analysis

This is not a new fundamental catalyst; it reinforces an already crowded quality-defensive trade. COST and WMT should outperform discretionary retail in a risk-off tape, but their downside beta is likely lower than their absolute downside: elevated expectations leave both vulnerable if traffic holds but mix shifts toward lower-margin grocery and consumables. The more actionable mechanism is share transfer from mid-market general merchandise retailers and weaker grocers, where price investment and fulfillment economics cannot be subsidized by advertising, membership, or marketplace profit pools.

WMT has the cleaner 6-18 month earnings setup because automation, advertising and third-party marketplace mix can offset grocery-margin pressure; this makes it less dependent on pure sales growth than COST. COST retains superior customer loyalty but is more exposed to multiple compression if membership-fee renewal and comparable-sales growth merely normalize rather than deteriorate. In a consumer slowdown, the likely losers are TGT and BJ, with TGT facing discretionary mix and inventory-markdown risk, while BJ lacks comparable non-retail profit streams and scale advantages.

UL is a more nuanced defensive: emerging-market exposure creates volume runway but also FX, local-currency affordability and commodity-input risk that a U.S. recession hedge does not address. Its portfolio separation/restructuring could unlock a higher personal-care multiple over 6-18 months, but execution costs, stranded overhead, and regulatory/antitrust review around the food transaction can delay any rerating. MKC is not an automatic beneficiary: a more focused flavor business could gain strategic relevance, but deal terms and synergy allocation—not headline logic—will determine value creation.

Contrarian view: if macro stress is caused by disinflation and falling rates rather than a sharp employment shock, expensive defensives may lag cyclicals and long-duration growth despite stable earnings. Watch monthly retail sales, WMT/COST traffic versus ticket, and gross-margin commentary; a sustained traffic deceleration or increased promotional intensity would falsify the assumed resilience.

Key Decisions for Investors

• Use WMT as the preferred defensive retail long over the next 3-6 months; pair with short TGT to isolate share-gain and margin-mix upside. Target a 10-15% relative return if consumer spending slows, with exit if WMT e-commerce/advertising profit growth decelerates materially or TGT demonstrates sustained traffic recovery without incremental markdowns.
• Avoid adding outright COST after risk-off rallies; maintain only as a low-beta core holding. Prefer buying a 8-12% pullback or post-earnings weakness if membership renewal and traffic remain intact; the key risk is valuation derating on merely normalized comps, not an impairment of the business model.
• Establish a 6-12 month long UL / short XLP relative position only after confirming transaction structure, separation costs, and pro-forma leverage for the food combination. The thesis is multiple expansion from a cleaner beauty/home-care earnings mix; exit on adverse regulatory action, margin dilution beyond guidance, or emerging-market volume deterioration.
• Monitor BJ and TGT as negative read-through alerts during the next two monthly sales/earnings updates. Evidence of WMT/COST traffic gains alongside BJ/TGT gross-margin pressure supports scaling the WMT/TGT pair; broad industry traffic resilience would argue against it.