2 Stocks That Look at Risk if Inflation Rises
Avoid these overpriced stocks, especially if you expect inflation to spike.
Susan Dziubinski: Hi. I’m Susan Dziubinski, co-host of The Morning Filter podcast. On a recent episode, Morningstar’s Chief US Market Strategist Dave Sekera talked about several overvalued stocks to consider selling if you think inflation is going to spike. You can find a link to the episode below this video.
Today, we’re adding two more stocks to the list. The stocks of both of these companies are trading significantly above what Morningstar thinks they’re worth. They both also look at risk in an inflationary environment.
2 Stocks That Look Vulnerable if Inflation Rises
The first stock to avoid if inflation rises is Tapestry. Tapestry is the parent company of popular accessories and fashion brands, Coach and Kate Spade. We think Tapestry has carved out a narrow economic moat based strictly on the brand strength of Coach. In a tough market for luxury brands, Tapestry’s marketing and merchandising efforts for Coach have continued to attract new young customers. But if inflation intensifies, shoppers could tap the brakes on buying nonessentials like new handbags and other accessories. Tapestry’s stock trades well above our $76 fair value estimate.
Read Morningstar’s full report on Tapestry.
The second overpriced stock to avoid if inflation heats up is TJX Companies. The world’s largest off-price apparel and home fashions retailer, TJX has carved out a wide economic moat with its portfolio of stores that includes TJ Maxx, Marshalls, and Home Goods. The company effectively leverages a global vendor network, rapid inventory turnover, and a low fixture store model that creates a treasure hunt experience across middle- to upper-income cohorts. But if inflation heats up and shoppers pull back on nonessential spending, this overpriced stock could tumble. We think shares are worth $100 each.
Read Morningstar’s full report on TJX Companies.
For more stock ideas, be sure to tune into The Morning Filter each week, wherever you get your podcasts. And visit Morningstar.com, too.
Morningstar senior analyst David Swartz and analyst Brett Husslein provided the research behind this segment.
Watch 3 Dividend Stocks for April 2026 for more from Susan Dziubinski.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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