The month of September has kicked off with some rocky start for the major stock indexes after a global sell-off in August. As investors prepare for potential turmoil, Wolfe Research has released an updated list of high-conviction stock picks known as the Alpha List. This list features stocks that the firm believes are poised to break out over the next year.

New Additions and Removals

In the September update, Wolfe Research has made some changes to the Alpha List. Among the new additions are Energy Transfer and Fifth Third Bancorp, while Cheniere Energy and Eli Lilly have been removed from the list. These changes reflect the firm’s evolving outlook on these companies and their potential for growth.

Fifth Third Bancorp is one of the newly added names to the Alpha List, with Wolfe Research predicting that the stock will outperform in the coming months. The firm’s target price implies more than a 16% upside from the current level, citing a soft landing scenario as a catalyst for growth. With low commercial real estate exposure and high-quality consumer exposure, Fifth Third Bancorp is expected to see record net interest income if the Federal Reserve implements five 25 basis point cuts through the end of 2025.

Adobe is another stock on Wolfe’s list, with the firm expressing bullish sentiment on the company’s future performance. Despite a 3.6% decline year-to-date, Adobe has seen a significant increase in share price in the past three months after beating second-quarter estimates. Wolfe Research’s price target implies a 19% upside from the current level, highlighting the company’s market leadership in creative design and enterprise penetration as key strengths.

Digital infrastructure firm Vertiv has also made it to the Alpha List, with Wolfe Research citing end-market momentum and earnings potential as factors for potential outperformance. The firm sees a path to over 20% profit margins for Vertiv, with shares up more than 56% this year. Analyst Nigel Coe emphasizes the company’s response to inflationary pressures and strong volume leverage as tailwinds for growth.

Investment firm KKR and retailer Walmart are two additional names on Wolfe’s Alpha List. Both stocks have already seen significant gains this year, with KKR rising 42% and Walmart gaining 47%. These companies are favored by the firm for their growth potential and strong performance outlook.

Wolfe Research’s updated Alpha List for September highlights several key stocks to watch in the coming months. With a focus on companies poised for growth and outperformance, investors may find value in considering these stock picks for their portfolios.

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