Wealthy consumers are getting a lot of credit for keeping the U.S. economy going. Despite the highest inflation rate in 40 years and the highest interest rates in nearly 25 years, the rich have continued to spend. The top 20% of U.S. households account for nearly 40% of all consumer spending. And these Americans, whose average income exceeds $176,000 a year after taxes, have kept on spending coming out of the COVID-19 pandemic, buying luxury items ranging from clothing and jewelry to cosmetics and cars. Many economists credit the continued spending by wealthy consumers with helping the economy avert a recession over the past year and say they may help the U.S. Federal Reserve achieve its goal of a soft landing. Here are three luxury stocks to upgrade your portfolio.

Ferrari (RACE)

Luxury sports car maker Ferrari (NYSE:RACE) has been one of the few automotive stocks to rise over the past year. RACE stock gained 54% over the last 12 months and has been a strong market outperformer. However, the share price pulled back 6% since the beginning of December and is 10% below its 52-week high, presenting an opportunity for investors to buy the stock on weakness. Analysts remain bullish on Ferrari, with the average price target on the shares over 8% higher than current levels.

Ferrari remains the leader in luxury race car sales and has a healthy backlog of orders, which analysts like. They also like that the company is planning to launch 15 new models by 2026 — many of which will be partially or fully electric. The company is aiming for 80% of its sales to come from hybrid and electric models by the end of the decade. Ferrari also boasts industry-leading margins, with a gross margin of 49%, double that of most companies in the vehicle and parts industry.

Ralph Lauren (RL)

Clothing and luxury retailer Ralph Lauren (NYSE:RL) is the company behind the polo player logo. It is a well-known brand around the world that commands premium sales prices. RL stock performed well over the past year as consumer spending, particularly among wealthy individuals, remained strong. In the past 12 months, RL stock rose 26%, basically matching the performance of the benchmark S&P 500 index.

However, despite its strong returns, RL stock doesn’t look overvalued. The shares are currently trading at 18 times 2024 earnings estimates, a little below average. The company also pays a quarterly dividend of 75 cents, giving it a decent yield of 2.10%. Ralph Lauren continues to make strides in advancing its digital and omnichannel sales channels through investments in mobile, including its proprietary app. The ability for customers to buy online and pick their purchases up in-store is helping to drive sales.

Tapestry (TPR)

Now for a buy-the-dip candidate. That pick would be Tapestry (NYSE:TPR), the New York-based parent company of luxury brands like Coach, Kate Spade, Versace and Jimmy Choo — among others. TPR stock struggled over the past year, falling 5%. However, the share price has tripled since the onset of the COVID-19 pandemic, when most of its stores were shuttered or operating at reduced capacity. Also, the stock has gained 38% since the market began to rally in November of last year.

Right now, TPR stock looks undervalued, trading at just nine times future earnings estimates. Tapestry also pays a quarterly dividend of 35 cents, giving it a strong yield of 3.80%. Analysts also like this stock. JPMorgan Chase (NYSE:JPM) recently raised its price target on TPR stock to $46, implying a 25% upside from current levels, and named the company one of its top “value idea[s]” for 2024. JPMorgan noted that Tapestry is successfully growing its direct-to-consumer sales channel.

On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.