Wolfe Research refreshes high-conviction ideas heading into H2

Investing.com -- Wolfe Research has updated its Alpha List, adding Targa Resources (NYSE: TRGP), M&T Bank (NYSE: MTB), and Warner Music Group (NASDAQ: WMG), while removing Energy Transfer (NYSE: ET), Kinsale Capital, and Netflix (NASDAQ: NFLX) in a strategic rotation based on near-term catalysts and valuation.

Wolfe analysts added Targa as the firm’s preferred way to play U.S. liquids-focused infrastructure.

“We expect continued well above average growth now at a discount valuation,” they said, replacing Energy Transfer, which has seen less relative upside.

The firm also swapped out Kinsale Capital for M&T Bank, citing near-term growth headwinds for KNSL.

“We continue to see meaningful long-term value [in KNSL], but believe persistent decelerating top-line growth headwinds may add NT pressure.”

Meanwhile, M&T Bank is expected to benefit from “low-single digit revenue growth, better-than-expected operating efficiency, top-of-the-class credit, and capital optionality.”

Warner Music Group replaces Netflix on the list, as Wolfe sees WMG poised to ease investor concerns in 2026 and benefit from a robust music industry outlook.

“Music industry growth and labels’ share remain robust, and WMG looks set to accelerate,” the note said. With shares trading at a steep discount to rival Universal Music Group (AS:UMG), Wolfe estimates 12-month upside of +21% and a +24% total shareholder return.

Among existing Alpha List names, Wolfe continues to favor Amazon (NASDAQ: AMZN), Micron (NASDAQ: MU), Twilio (NYSE: TWLO), and Walmart (NYSE: WMT). Overall, Wolfe favors a mix of growth and value as the second half of 2025 begins.

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