These stocks typically have the best and worst Septembers.
Some companies, like Bath & Body Works and Southwest Airlines, could help investors navigate what has proven to be a historically tough month for stocks. September is known as the worst month of the year for the S&P 500, Dow Industrials, Nasdaq Composite, and Russell 2000, according to the Stock Trader’s Almanac — and the last four Septembers have seen particularly steep declines. This year, investors are in even choppier waters as markets await the outcome of the U.S. presidential election in November. Using FactSet, we looked at the average September performance of companies in the S&P 500 over the past decade, then sorted them by best and worst. Here’s a look at the stocks with the best average September performance: Southwest Airlines has had an average gain of 3.27% in September over the past decade, according to our analysis. The Dallas-based airline — up about 7.2% over the past month but down for the year — is generally favored by analysts. Those who follow the stock have an average hold rating, according to FactSet. Evercore ISI analyst Duane Pfennigwerth upgraded Southwest from hold to outperform on Tuesday, saying the company could see strong upside in the future as it continues to monetize its underlying fleet value and focus on margins. The firm’s $35 price target implies 21% upside, which is higher than the consensus price target of analysts polled by FactSet. Cybersecurity provider Palo Alto Networks is up 21.7% this year and could move higher this month, based on its historical performance anyway. The stock has risen an average of 2% in September over the past decade. Palo Alto has recently been on the rise following a stronger-than-expected fiscal fourth quarter and an upbeat outlook. Several Wall Street firms raised their price targets on the company following its latest earnings report. “PANW’s platformization strategy is successfully driving larger deals,” Morgan Stanley analyst Hamza Fodderwala wrote in a note to clients on Aug. 20, reiterating his bullish rating. “Looking ahead, multiple product cycles, favorable AI, and easier comparisons should drive top-line acceleration in fiscal 2025.” Bath & Body Works has been the top performer among the companies, rising an average of 6.16% in each of the past 10 Septembers. Recently hurt by weaker-than-expected Q2 revenue, Bath & Body Works is down more than 28% year-to-date. Still, analysts polled by FactSet see more than 38% upside potential for the fragrance retailer. Meanwhile, here are the worst-performing companies over the past 10 Septembers: Incyte, a developer of cancer treatments, and mobile computing company Zebra Technologies have seen their worst average September performance in the past decade, with each losing more than 8% on average for the month. Wolfe Research analyst Rob Ginsberg said Tuesday that he believes Incyte stock is “on the verge of a breakout” and recommends buying the stock. The stock has gained more than 9% this quarter, in part due to excitement around positive test results announced Aug. 15 for Incyte’s Phase 3 trial of tafasitamab, a prescription treatment for adults with relapsed or resistant diffuse large B-cell lymphoma. Other companies that performed poorly overall in September included construction company PulteGroup and movie studio and CBS television owner Paramount Global.
