Tax refunds set to rise in 2026, and these stocks may benefit, Wolfe says
Taxpayers can expect a small windfall from refunds this filing season, and several stocks could see a bump as a result, according to Wolfe Research. The tax filing season kicks off on Jan. 26, with the Internal Revenue Service expecting to receive roughly 164 million individual income tax returns this year. Individuals have until April 15 to file and pay taxes owed, but those who go on extension may take until Oct. 15 to submit returns. New provisions from President Donald Trump’s ” big beautiful bill ” apply retroactively to the 2025 tax year, which is expected to result in heftier tax refunds. Those changes include a larger standard deduction, a bonus deduction for senior citizens and a tax break on tips . The average tax cut per filer is expected to total a national average of $3,752 in 2026, according to the Tax Foundation . The largest refunds tend to land in mid- to late-February due to rules around the timing of the payout for the additional child tax credit and the earned income tax credit, Wolfe found. That influx of tax refund dollars could be a boon for certain stocks, too, Wolfe’s chief investment strategist Chris Senyek said. “Our sense is these companies will benefit from incremental consumer spending from the lower income consumer as 2026 tax refunds rise,” he wrote in a Tuesday report. See below for a list of some of those companies. Big-box retailer Costco Wholesale made it to Wolfe’s list. Last week, Bernstein analyst Zhihan Ma called the company one of “the biggest winners from tax refunds” due to its exposure to higher income consumers and market share gain trends. Ma rates the stock outperform, noting that while there are concerns around Costco’s ability to sustain its membership fee income growth, the wholesaler has other levers at its disposal. These include “incentivizing members to upgrade and growing retail media, which could make up for any shortfall if U.S. membership fee income growth were to slow,” she wrote. “Longer term, we see meaningful upside led by COST’s long growth runway internationally, which is margin accretive and will help accelerate [membership fee income] growth,” Ma said. Costco is roundly liked on Wall Street, with 25 of 38 analysts rating it buy or strong buy, according to LSEG. Consensus price targets call for nearly 9% upside. Shares have gained roughly 3% in the past 12 months, and the current dividend yield is about 0.6%. Retail trading platform Robinhood could also see a boost from larger refunds as taxpayers redeploy their dollars into the markets. Last week, Piper Sandler named Robinhood a top pick to play secular growth in retail stock and crypto trading and other types of investment. “HOOD has become the go-to broker for Gen Z and Millennials in the U.S.,” Piper analysts led by Patrick Moley wrote. “Look no further than its prediction market offering in 2025, which became HOOD’s fastest growing product ever.” This feature is currently generating over $300 million of annualized revenue, Piper estimated. Robinhood is also a favorite among analysts, with 21 of 26 rating it a buy or strong buy, according to LSEG. While the stock has soared more than 180% in the past 12 months, consensus price targets still see nearly 27% upside from current levels. Other names that emerged on Wolfe’s list include off-price retailer TJX Companies , cruise operator Carnival and Olive Garden parent Darden Restaurants . —CNBC’s Michael Bloom contributed reporting.
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