Wellness stocks to benefit from a 'generational shift toward healthy habits': BofA

Investing.com -- A generational shift toward healthy habits is driving growth in wellness-related stocks, according to Bank of America (NYSE:BAC). 

Younger demographics, including Gen Z and millennials, are prioritizing fitness, wellness-focused discretionary spending, and activity-based leisure activities, BofA analysts wrote.

“We believe there is an ongoing generational shift toward healthy habits, which is supportive of wellness stocks,” said BofA. 

The firm cited three major trends shaping the sector: a rise in fitness spending, increasing participation in leisure-based activities such as pickleball, and greater interest in wellness-related products like non-alcoholic beverages and anti-aging treatments.

Fitness spending has been particularly strong, with BofA credit and debit card data showing a 7% year-over-year increase in February—the largest growth in 19 months. 

"Millennials and Gen Z are allocating a higher percent of their budget to fitness while foot traffic growth well surpassing bars/pubs," BofA noted. 

The firm also highlighted pickleball’s rapid rise, with participation reaching 20 million players in 2024, up 46% from 2023.

In the wellness products space, non-alcoholic beer and seltzer sales have outpaced their alcoholic counterparts by 28 percentage points since 2021, while Google (NASDAQ:GOOGL) searches for cold plunge and red light therapy have risen significantly, according to BofA.

Among BofA’s top wellness stock picks, Life Time, Planet Fitness (NYSE:PLNT), and SN stand out. 

The firm raised its price objective for LTH to $45, citing pricing power and high membership demand. 

“We believe the company is particularly well positioned to take advantage of shifting wellness, fitness, and leisure trends,” BofA wrote. 

PLNT is said to be benefiting from strong same-store sales momentum, while SN is expanding its portfolio with a new red/blue light therapy mask, CyroGlow.

“SN is our top wellness discretionary products pick, as it expands it product portfolio with the launch of its red/blue light therapy mask CyroGlow in 1Q,” BofA concluded.