As we enter the month of September, investors are keeping a close eye on key stocks that have the potential to break out in the coming weeks. Despite a rocky start to the month, there are several companies that have been highlighted by Wolfe Research as high-conviction stock picks. These stocks have the potential to outperform and deliver significant returns over the next year. Let’s take a closer look at some of the names on Wolfe’s Alpha List and why they stand out.
One of the newly added names to Wolfe’s list is Fifth Third Bancorp. According to Wolfe, Fifth Third is poised to outperform with a target that implies over 16% upside from the current price. The firm believes that the company’s low commercial real estate exposure and high-quality consumer exposure will act as catalysts for growth. Additionally, if the Federal Reserve implements multiple rate cuts, Fifth Third could see record net interest income next year. Evercore ISI has also identified Fifth Third as a key beneficiary of lower rates, further supporting Wolfe’s bullish stance on the stock.
Another name on Wolfe’s list is Adobe. Despite a slight decline in share price year to date, Adobe’s stock has surged over 28% in the past three months following strong fiscal second-quarter results. Wolfe believes that Adobe has the potential for further upside, with a price target that implies a 19% increase from the current levels. The firm points to Adobe’s market leadership in creative design and its strong presence in enterprise-level markets as key strengths. Additionally, the firm sees AI as a significant growth driver for Adobe, leading to faster subscription growth and better monetization of its customer base.
Digital infrastructure firm Vertiv is also featured on Wolfe’s list of top stocks to watch. The firm highlights Vertiv’s end-market momentum and potential for earnings upside as key drivers of future outperformance. With shares up over 56% this year, Wolfe sees significant profit margin expansion for Vertiv, with a “credible” path to more than 20% margins. The firm’s target price implies a 41% upside from Wednesday’s closing price, indicating strong potential for investors.
In addition to Fifth Third Bancorp, Adobe, and Vertiv, Wolfe’s Alpha List includes other companies such as investment firm KKR and retailer Walmart. Both KKR and Walmart have already experienced substantial gains this year, with KKR rising 42% and Walmart gaining 47%. Despite these gains, Wolfe sees further potential for growth in both stocks, highlighting their strong performance and promising outlooks.
September presents a number of exciting opportunities for investors looking to capitalize on the stock market’s potential. By keeping a close eye on key stocks like Fifth Third Bancorp, Adobe, Vertiv, KKR, and Walmart, investors can position themselves for potential growth and outperformance in the coming months. With the support of research from firms like Wolfe, investors can make informed decisions and maximize their investment returns.