Investing.com -- Bank of America expects the 2026 tax refund season to deliver a major boost to several SMID-cap e-commerce names, with analysts naming two key names it expects to benefit. The bank is projecting the strongest refund growth in years.
Analyst Michel McGovern told investors in a note that the season “is expected [to] see strong growth vs. recent years,” citing policy changes under the OBBBA.
According to BofA, its economists forecast a $65 billion increase in refunds this year, representing 18% year-over-year growth and making up the “lion’s share of nearly $100bn in fiscal stimulus.”
McGovern wrote that the biggest driver is “no tax on overtime,” with additional support coming from a larger SALT deduction and a higher standard deduction for seniors.
Timing will also matter. BofA noted that “70% of federal tax refunds are paid between February and April,” positioning refunds as a powerful Q1 catalyst.
Based on U.S. issuance of around 120 million refunds in 2024, the bank estimates that the average refund could rise by about $541.
BofA highlighted Carvana as a direct beneficiary, noting that “autos & auto service is a common use-case for tax refunds.”
The bank said Carvana remains well-positioned due to its “affordability focus and exposure to lower & middle-income buyers,” especially as high new-car prices push more consumers toward used vehicles. BofA reiterated its Buy rating on CVNA.
Wayfair is another standout. The analysts said refunds “could accelerate furniture replacement cycle” trends, adding that the company’s supply chain flexibility and tariff reprieve should help it meet demand without significant margin pressure.
BofA reiterated Buy on W, calling it its “Top Pick for SMID Cap eCommerce in 2026.”
