Top small-cap plays for 2026

Investment Recommendations - Jefferies highlights 17 buy-rated names expected to see earnings and sales acceleration in 2026 [1] - Valero is included on the best stocks list [1] - Coherent (COR) is a core position in a Smid portfolio for about 3 years, noted for steady earnings [2][3] - Textron (TXT) is favored due to anticipated increased capex in industrials and a good dividend [3][4] - Edwards Life Sciences is a strong performer in the healthcare sector [4] Market Dynamics - Companies benefit from low oil prices and high demand for gasoline, widening the crack spread [2] - Wall Street firms are raising earnings expectations for the next quarter and next year [2] - Life sciences companies are building positive momentum with capital investment in research, reflected in strong earnings and revenue growth [5][6] Consumer Trends - The low-end consumer is struggling due to inflation and higher gas prices [7] - Dollar General's stock is up 39% year-to-date, despite concerns about the lower-end consumer [8] - Same-store sales remain muted for Dollar Tree and Dollar General [9]