As September unfolds, investors are keeping a close eye on the stock market after a rocky start to the month. Wolfe Research recently updated its Alpha List, which features the firm’s high-conviction stock picks that are expected to perform well over the next year. The list includes both additions and removals, with names like Energy Transfer and Fifth Third Bancorp being added, while Cheniere Energy and Eli Lilly were removed.
Among the newly added names, Fifth Third Bancorp stands out as a stock set to outperform according to Wolfe Research. With a target suggesting over 16% upside from the current price, the firm sees a favorable scenario ahead for Fifth Third. Factors like low commercial real estate exposure and high-quality consumer exposure are seen as catalysts for potential growth. Additionally, if the Federal Reserve implements rate cuts as anticipated, Fifth Third could see record net interest income next year.
Another standout on Wolfe’s list is Adobe, a company that has seen significant gains in recent months. Despite a slight year-to-date decline, Adobe’s stock has surged over 28% in the past three months. Wolfe Research maintains a bullish outlook on Adobe, with a price target indicating a 19% upside potential. The firm emphasizes Adobe’s market leadership in creative design for professional use cases and foresees positive impacts from AI, contributing to its competitive edge.
Digital infrastructure firm Vertiv is also highlighted by Wolfe Research as a potential performer in the coming months. With strong end-market momentum and earnings potential, Vertiv is seen as having a clear path to achieving over 20% profit margins. Despite a significant increase in share price this year, Wolfe’s target suggests a 41% upside, reflecting the firm’s confidence in Vertiv’s future growth prospects.
In addition to Fifth Third Bancorp, Adobe, and Vertiv, Wolfe’s Alpha List includes other notable names like investment firm KKR and retail giant Walmart. Both KKR and Walmart have already experienced substantial gains this year, with KKR rising 42% and Walmart gaining 47%. These stocks are expected to continue their positive trajectory based on the analysis conducted by Wolfe Research and other firms.
Overall, as investors navigate the uncertainty in the current market environment, keeping a close watch on high-conviction stock picks like those highlighted by Wolfe Research can provide valuable insights into potential opportunities for growth and investment. By identifying companies with strong fundamentals, positive catalysts, and promising outlooks, investors can make informed decisions to capitalize on the ever-changing dynamics of the stock market.