Should investors still be thinking defensive in today’s market?

There are many strategies and themes that can guide an investor. One area that investors may have considered this year is defensive shares. 

Investors may choose to invest in ASX defensive stocks during periods of global uncertainty because these companies tend to generate more stable earnings and dividends even when economic conditions weaken. 

Why investors are targeting defensive shares in 2026

The current conflict involving Iran has increased concerns about disruptions to global oil supplies, which has pushed energy prices higher and contributed to renewed inflation fears. 

Higher inflation can lead central banks to maintain or increase interest rates, which we have already seen in 2026. 

This can place pressure on growth-oriented sectors such as technology and consumer discretionary stocks. 

In contrast, defensive sectors on the ASX – including utilities, healthcare, consumer staples, and telecommunications – often perform more steadily. 

This is because demand for their products and services remains relatively consistent regardless of economic conditions. 

As geopolitical tensions and rising oil prices continue to create market volatility, many investors view defensive stocks as a safer option for preserving capital and generating reliable income in an uncertain environment.

While these economic conditions seem to point towards a case for defensive options, some well-known defensive shares are receiving mixed views from experts. 

Here’s the latest guidance on three defensive options. 

Suncorp Group Ltd (ASX: SUN)

Suncorp shares are considered defensive because insurance demand tends to remain steady even in weaker economic conditions.

However this hasn’t translated to growth in 2026 for Suncorp shares. 

Its share price is down 2.4% in 2026 compared to a flat performance from the S&P/ASX 200 Index (ASX: XJO). 

Based on recent estimates from brokers, it is hovering around fair value. 

These defensive shares closed last week at $17.37 each, right around Morgan’s recent target of $17.79. 

Woolworths Group Ltd (ASX: WOW)

Woolworths dominant market share in the Australian supermarket landscape has long held it in good stead even during tough economic conditions. 

This has led to an 18% rise in share price year to date for Woolworths shares. 

The team at JP Morgan still sees modest upside in the short term for these defensive shares, recently placing a $37 price target on the company. 

From yesterday’s closing price of $34.75 this indicates an upside of roughly 6%. 

Transurban Group (ASX: TCL)

Transurban is one of the world’s largest toll-road operators, managing and developing urban toll-road networks in Australia and North America. 

The company develops, operates, maintains and finances toll-road networks. 

This places the company firmly in the defensive theme as revenue is supported by long-term transport infrastructure usage.

It has risen a modest 2% in 2026, however much of its value lies in its consistent dividend payments.

Recent price targets from experts are hovering around $16.10, indicating a modest capital growth potential from the current price of $14.49. 

Foolish takeaway

Defensive shares on the ASX may not deliver the same high-growth returns as more cyclical or speculative stocks.

However they can play an important role in preserving capital.

In periods of volatility these stocks tend to be more resilient, meaning they are more likely to hold their value and provide steady dividends even when broader markets decline.

The post Should investors still be thinking defensive in today’s market? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group and Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.