Wells Fargo names 13 stocks as overweight tactical ideas

Investing.com -- Wells Fargo has released its list of overweight tactical ideas for the fourth quarter, naming 13 stocks across various sectors that the firm believes are positioned for gains.

The list includes Axsome Therapeutics (NASDAQ: AXSM), with Wells Fargo expecting fourth quarter Auvelity prescription data to show accelerated growth. The firm anticipates this will boost interest in the drug's commercial potential for Alzheimer's Disease Agitation treatment.

C.H. Robinson Worldwide (NASDAQ: CHRW) made the list as Wells Fargo sees improving brokerage margins and continuing market share gains. The firm expects potential third quarter earnings beats and moderate insurance costs to drive estimate revisions and multiple expansion.

Consolidated Edison (NYSE: ED) received an upgrade to overweight with a $118 price target. Wells Fargo notes the utility company is insulated from many sector risks as utility sentiment approaches peak negativity ahead of the November elections.

Ferguson Enterprises (NYSE: FERG) is viewed positively heading into third quarter earnings, with Wells Fargo citing accelerating volumes, stable pricing, and FloWorks accretion.

Fifth Third Bancorp (NASDAQ: FITB) is Wells Fargo's top fourth quarter regional bank pick. The firm expects Comerica integration synergies, accelerating buybacks, and return on tangible common equity expansion to drive earnings above consensus. Wells Fargo sees a path to sub-53% efficiency and 20%+ ROTCE in 2027, supporting a $67 price target.

Hexcel Corporation (NYSE: HXL) is expected to outgrow aerospace peers as widebody production ramps up, with earnings per share projected to more than double by the end of the decade. The stock currently trades at 17x EV/EBITDA, a 20% discount to aerospace peers.

Kymera Therapeutics (NASDAQ: KYMR) is included based on risk-reward at current levels. Wells Fargo believes positive Phase 2b data for KT-621 in atopic dermatitis should drive a meaningful re-rating.

MSCI Inc (NYSE: MSCI) is positioned to benefit from growing demand for data and the shift toward quantitative investment strategies. Wells Fargo expects a second quarter beat and continued growth acceleration.

Microsoft Corporation (NASDAQ: MSFT) has a favorable tactical setup heading into the fourth quarter, with catalysts including realization of its AI advantage, the upcoming November Ignite conference, and new segment reporting. Shares trade at approximately 25x P/E.

Occidental Petroleum Corporation (NYSE: OXY) could re-rate toward a premium multiple as the company transforms its capital structure through pre-funding preferred equity redemption and executes on its resource position in the Permian and overseas.

Roblox Corporation (NYSE: RBLX) has a favorable setup into the fourth quarter, with discovery changes appearing to drive higher hit frequency. Wells Fargo sees booking guidance of $2.01 billion to $2.07 billion, 5% above street estimates.

United Rentals (NYSE: URI) benefits from tightening machinery supply, early stages of rental rate recovery, and accelerating non-residential construction supported by U.S. semiconductor fab onshoring.

Veeva Systems (NYSE: VEEV) has a favorable tactical setup with the top 20 CRM race closed at 14-6. Wells Fargo sees remaining catalysts including CRM win-backs, Falcon AI proof points, a firmer Crossix backdrop, and a third quarter beat and raise setup.

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