Wall Street banks back small-cap stocks as Russell 2000 outperforms in 2026

Traders Union
All News
Financial News
Wall Street backs small-cap stocks

Highlights

Russell 2000 hits a record 3,033.75 on Thursday, up 21% in 2026, outperforming S&P 500’s 7.5% gain and marking its best first half since 1991.
TD Cowen reiterates buy rating on Freshpet with a $80 target, implying 50% upside, citing premium pet food growth and 2.7% volume share in dog food.
Bank of America assigns Omnicell a buy rating and $70 target, implying 77% upside, driven by new product launches and a major pharmacy automation cycle.

Bank picks follow strong small-cap momentum

As first reported by CNBC, Bank of America and TD Cowen have identified a group of small-cap stocks they believe are positioned to benefit from the market's recent shift away from large technology names. Their lists span healthcare technology, retail and biotech, with Freshpet and Omnicell among the names singled out for potential gains.

Small caps, typically defined as listed companies with market values of about $250 million to $2 billion, are outperforming broader U.S. benchmarks this year. The Russell 2000 reaches as high as 3,033.75 on Thursday, an all-time high and up 21% in 2026, while the S&P 500 is ahead 7.5%. That puts the small-cap benchmark on track for its best first half since 1991.

Bank of America analyst Jill Carey Hall says in a Thursday note to clients that the Russell 2000 is the best-performing size index in the first half. She says the bank still sees upside opportunities within small caps for less rate-sensitive stocks, especially because Russell 2000 performance has been concentrated this year.

Freshpet and Omnicell stand out

TD Cowen says Freshpet continues to benefit from premiumization in pet food as consumers seek higher-end products for their pets. Analyst Robert Moskow says in a June note that the company is still in the middle stages of benefiting from the pet humanization trend, and that its 2.7% volume share of the dog food category leaves significant room to win customers from dry kibble.

TD Cowen maintains a buy rating on Freshpet, and its $80 price target implies about 50% upside from Thursday's close. Moskow adds that the super-premium dog food segment continues to grow about 7% to 10% annually even as consumers cut spending elsewhere and canine adoption rates decline. Freshpet has a market capitalization of $2.6 billion.

Bank of America says Omnicell is positioned to outperform as new pharmacy automation products gain traction. Analyst Allen Lutz says the Fort Worth, Texas-based company is set to benefit from a once-in-a-decade product replacement cycle, while the market is underestimating the potential because of slower bookings growth.

The bank points to Omnicell's recently launched Titan XT automated dispensing cabinet and OmniSphere cloud analytics platform as products that could lift earnings expectations. Bank of America has a buy rating and a $70 price objective on Omnicell, implying 77% upside from Thursday's close. Omnicell has a market capitalization of $1.8 billion.

Our earlier coverage of Labcorp (LH) focused on the company’s expanded DPYD Genotype test, designed to help flag cancer patients at higher risk of severe side effects from fluoropyrimidine-based chemotherapy. We also noted that the update strengthens Labcorp’s precision-medicine and oncology diagnostics positioning, while the stock’s technical setup pointed to consolidation near resistance with a potential breakout only if key levels are cleared.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.