As we enter the month of September, investors are keeping a close eye on the stock market, particularly after the rocky start that the major averages have experienced. The global sell-off in August has left many on edge, with concerns about potential turmoil lingering in the air. Wolfe Research has recently updated its Alpha List, which features the firm’s high-conviction stock picks that are expected to break out in the coming year.
In Wolfe’s September update, we see the addition of Energy Transfer and Fifth Third Bancorp to the list, while Cheniere Energy and Eli Lilly have been removed. Among the newly added names, Fifth Third Bancorp is highlighted as a stock set to outperform, with a target that implies more than 16% upside from the previous close. The firm points to a soft landing scenario as a catalyst for Fifth Third, given its low exposure to commercial real estate and high-quality consumer exposure.
Adobe is another stock on Wolfe’s radar, despite being down 3.6% year to date. The company’s strong performance in the fiscal second quarter has caught the attention of investors, with shares climbing more than 28% in the past three months. Wolfe remains bullish on Adobe, with a price target that suggests a 19% upside from the current levels. The firm emphasizes Adobe’s market leadership, especially in creative design for professional use cases, as a key factor in its growth potential. With tailwinds from AI and strong subscription growth, Wolfe sees Adobe as a strong contender in the market.
Vertiv, a digital infrastructure firm, is also on Wolfe’s list of stocks to watch. The firm highlights end-market momentum and earnings upside as drivers for potential outperformance. With shares already up more than 56% this year, Wolfe sees a path to more than 20% profit margins for Vertiv. The firm’s target implies a significant 41% upside from the current levels, emphasizing the positive outlook for the company’s future performance.
In addition to the key stocks mentioned above, Wolfe’s Alpha List also includes investment firm KKR and retailer Walmart. Both stocks have already seen substantial gains this year, with KKR rising 42% and Walmart gaining 47%. Despite their strong performance, Wolfe sees further potential for growth in these stocks, highlighting their solid position in the market and positive outlook for the future.
Overall, Wolfe Research’s Alpha List offers valuable insights into the key stocks to watch in September. With a focus on high-conviction picks and potential outperformers, investors can use this information to make informed decisions about their investment strategies. As the month unfolds, it will be interesting to see how these stocks perform and whether they live up to the expectations set by Wolfe Research.