Although small-cap stocks have taken a hit in recent weeks, Barclays Capital has several picks in the sector that it expects to have significant upside. So far in April, the Russell 2000 has lost more than 3%. Despite the macroeconomic challenges facing the small-cap universe, Barclays’ analysts named a slate of companies the firm expects to grow as margins improve and services spending increases. “A common theme in this edition of our selections is a focus on sustainable earnings and margin expansion,” Venu Krishna, head of U.S. equity strategy at Barclays, wrote in a recent report. The following names show strong upside potential, with a median upside to price target of 28%. Independence Realty Trust made Barclays’ list. Analyst Anthony Powell expects the apartment real estate investment trust to significantly benefit from the ongoing shift in consumer spending from goods to services as well as the easing of labor shortages. The company owns units in the Sunbelt region of the U.S., which Powell views favorably due to stronger migration and job growth trends in that area. Powell has a price target of $24 on the REIT, which represents 52% upside from where shares closed on Tuesday. The REIT is down more than 5% in 2023. Another name on the list is Atlas Energy Solutions , a newly public fracking stock. Barclays sees an upside of 37% for the stock since Tuesday’s close. Analyst Derek Podhaizer recently said that Atlas is the only public pure play for fracking in the Permian Basin located in the Southern U.S. The company stands to benefit from an increase in oil prices, he added. The company is also deploying a first-of-its-kind Permian conveyor system called the Dune Express, which Podhaizer expects will increase the company’s presence and efficiency. Retailer Dick’s Sporting Goods , water management products manufacturer Advanced Drainage Systems and US Foods are companies Barclays expects to benefit from expanding margins through strong sales growth and declining costs. Barclays’ Jeffrey Bernstein noted that US Foods ended 2022 with “impressive momentum” after an activist campaign from Sachem Head Capital last year resulted in new board members and the departure of its previous CEO. The stock has gained more than 9% this year. -CNBC’s Michael Bloom contributed reporting.