According to Bank of America, amid pending inflation and recession, consumers are looking to rein in spending – and that means certain “trade-off” stocks will perform better. in this year. Consumers have cut back, with retail sales falling 1.1% in December compared with November. Inflation remains high, although it is starting to ease. Meanwhile, Bank of America economists are predicting a mild recession in the first half of 2023. “We expect increased ‘trade-offs’ for lower ticket options across most discretionary categories as even more affluent consumers seek access to price,” wrote analyst Robert Ohmes in a note Wednesday. In this environment, he favors stocks that fit at least one of three themes: trade-off winners, undervalued retailer/entertainment brand transformation, and questions recovery fitness club. Here are three of Bank of America’s discount picks, which Ohmes expects to outperform in 2023. Consumers looking to save money on gym memberships can ditch their midsize gym and join Planet Fitness for $10 to $25 a month. Supporting Ohmes’ point are earlier samples. During the 2008-2009 recession, Planet Fitness same-store sales averaged 21% as consumers diverged from higher-priced options, Ohmes said. He sees a significant opportunity to grow the club and increase the proportion of royalties, and believes his differentiated business model will grow the market by targeting unsuspecting consumers. fully serviced. Ohmes said Planet Fitness also has a rapidly growing profit margin and return on investment, as well as growth in its equipment segment. The fitness franchise announced earlier this month 1.8 million new members joining by 2022, bringing its total membership to 17 million. It was also named a top pick by Piper Sandler, who said they liked the company’s recession-proof model. PLNT 1Y mountain Planet Fitness’ 12-month performance results’ Bank of America’s price target of $100 per share implies a 21% gain from Tuesday’s closing price. According to Ohmes, the Sports and Outdoor Academy will also perform better this year. The outdoor sports and leisure retailer, he said, had strong in-store sales during the last recession thanks to its offering of branded footwear and clothing at low prices. short. Ohmes pointed out that Academy’s long-term compound annual growth rate is in line with the slightly higher average among sportswear and sportswear retailers. However, he saw earnings rise significantly above conservative projections. The retailer also offers a wide range of single-player merchandise, Ohmes added, and will benefit from the increasingly budget-conscious millennials shopping at discount stores. Shares are up 25% above Bank of America’s $70 price target, as of late Tuesday Its Solo Stove fire pits include a desktop version that retails for around $120 for a backyard version. The largest costs more than $400. The company went public in October 2021 and struggled, down 76% in 2022. However, Ohmes expects its promotional pricing strategy to perform well in an inflationary environment. His $9-per-share price target implies a gain of nearly 120% from Tuesday’s closing price. — Michael Bloom of CNBC contributed to this report.