As we enter the month of September, investors are on high alert following a rocky start in the stock market. Wolfe Research has updated its Alpha List, which includes high-conviction stock picks that are expected to outperform in the coming year. With additions and removals made to the list, it is crucial to analyze the stocks mentioned and understand the reasoning behind their inclusion or exclusion.
One of the newly added stocks on Wolfe’s list is Fifth Third Bancorp, with a projected upside of over 16%. The firm believes that a soft landing scenario could act as a catalyst for the company, given its low commercial real estate exposure and high-quality consumer exposure. Additionally, if the Federal Reserve implements rate cuts as anticipated, Fifth Third could see record net interest income next year. This positive outlook is supported by Evercore ISI, which also sees Fifth Third as a key beneficiary of the rate cuts.
Despite a 3.6% decrease in share value year-to-date, Adobe has seen a significant surge in the past three months after beating second-quarter estimates. Wolfe Research is bullish on Adobe’s future prospects, with a price target implying a 19% upside. The firm attributes this optimism to Adobe’s market leadership in professional creative design and AI-driven growth opportunities. JPMorgan’s inclusion of Adobe in its focus list further solidifies the company’s growth potential.
Digital infrastructure company Vertiv has also made it to Wolfe’s list, citing end-market momentum and earnings upside as key drivers for potential outperformance. With a projected path to over 20% profit margins, Vertiv has already seen a significant increase in share value this year. Analysts point to the company’s strong response to inflationary pressures and future earnings potential as reasons to remain optimistic about its growth trajectory.
Investment firm KKR and retail giant Walmart are among the other names mentioned by Wolfe Research. Both companies have seen substantial gains this year, with KKR rising 42% and Walmart gaining 47%. While these stocks have already performed well, Wolfe’s inclusion of them on the list suggests that there may still be room for future growth. It is crucial for investors to closely monitor these stocks and consider the factors driving their continued success.
Wolfe Research’s updated Alpha List provides valuable insights into key stocks to watch in September. By carefully analyzing the reasoning behind each stock pick, investors can make informed decisions about their investment strategies. As the market continues to face uncertainty, keeping a close eye on these potential outperformers could lead to profitable outcomes in the months ahead.