Despite the major indexes trading near their all-time highs, there are still plenty of stocks that JPMorgan is bearish on in the coming quarter. Stocks managed to pull off a record performance in September — despite the month being traditionally difficult for the market — after the Federal Reserve cut rates for the first time in four years. But stocks may not be in the clear just yet, as historical trends also show October as a choppy month for equities. FactSet data showed that on average, the S & P 500 has posted a daily move of 1.3% in either direction in October since 1950. Election years also play a role, with the broad market index notching an average October decline of nearly 1% the month before an election, according to the Stock Trader’s Almanac. All in all, while stocks are currently near their all-time highs, there’s no guarantee that they’ll stay at these levels. Against this backdrop, JPMorgan surveyed its analysts for their top short ideas, or stocks that might underperform going into the fourth quarter. Traders who engage in short selling make their profits by borrowing stocks they believe will underperform and then buying them back at a lower price in the future. Here are some highlights from the list: Industrial and hardware manufacturer Stanley Black & Decker was one name that made the cut. Shares have risen 9% in 2024, leading to what JPMorgan analyst Michael Rehaut believes is an expensive valuation. Most analysts covering the stock currently have a hold rating on the name. The downside to average price target is around 2%. “Longer term, the competitive landscape has changed, in our view, and structural profitability is lower than prior cycle,” wrote Rehaut, who currently has an underweight rating on the stock. JPMorgan analyst Kenneth Goldman also has an underweight rating on Beyond Meat . Shares of the plant-based food producer have plunged 27% in 2024. “Plant-based meat continues to struggle as the fad fades,” the analyst wrote. Wall Street seems to agree with Goldman’s consensus, for the most part. Analysts are split between a hold or underperform rating on the name, and the average price target implies a downside of nearly 14%. JPMorgan is similarly bearish on industrial automation company Rockwell Automation , down 15% this year. Analyst C. Stephen Tusa has an underweight rating on the name and believes the firm will cut its investment spending, which could lead to rising concerns around underinvestment. “Most stretched consensus, in our view, with more negative revisions to come,” he wrote. “We see risk limited capex growth in areas in which ROK participates in years ahead.” Most analysts have rated the stock as a hold, and the average price target implies a potential 7% upside. Another name on JPMorgan’s list of short ideas is insurance firm Travelers , where analysts see a risk of earnings forecasts being reduced. The bank is also underweight clean energy firm FuelCell Energy . Analyst Mark Strouse said the company is consistently burning cash and there are limited catalysts to boost the stock.
