Piper Sandler identified defensive stocks it says could outperform if elevated rates persist, including Genuine Parts, Conagra Brands and insurers such as Arch Capital, Cigna and Everest.
The call comes as Treasury yields spike — the 10-year stood at 4.59% and the 30-year at 5.12% after topping 5.19%, its highest since July 2007.
Michael Kantrowitz said higher oil prices and rates have crushed the market-broadening trade since Feb. 27 by lifting equity risk premiums, even as earnings revisions and growth improve.
Among the names highlighted, Genuine Parts shows a 78% correlation to the 10-year yield and Conagra 75%, while insurers are seen benefiting because they can charge higher rates in a rising-yield environment.
Piper said stocks have largely absorbed higher-rate pressure so far, but meaningful index gains and a broader equity rally likely require yields to decline.
As recommended defensive stocks like Conagra falter, are Wall Street’s high-rate strategies actually reliable for investors?
What is the hidden risk if Treasury yields suddenly reverse, invalidating today's top defensive stock picks?