JP Morgan releases six major short targets in the Q4 consumer sector: Southwest Airlines Co. (LUV.US), Rivian (RIVN.US), and others are on the list.

J.P. Morgan released a research report on the U.S. consumer sector in the fourth quarter, focusing on the two sub-sectors within the S&P 500 consumer sector that have shown differentiated performance - the non-essential consumer goods sector (XLY.US) which has risen 5.06% year to date, and the essential consumer goods sector (XLP.US) which has declined 0.55%. The report selected six structural and tactical short targets, involving six listed companies - Southwest Airlines Co. (LUV.US), Rivian Automotive (RIVN.US), Brown-Forman Corporation Class A-B (BF.B.US), Beyond Meat (BYND.US), Krispy Kreme (DNUT.US), and Shake Shack (SHAK.US). Specifically, Southwest Airlines Co. stock has fallen 3.7% year to date, receiving a "underweight" rating from J.P. Morgan with a Seeking Alpha quant rating of "hold" (2.91). J.P. Morgan believes that the company is at the beginning of a transformation led by Elliott Management, and although demand is positive, the implied fourth quarter performance guidance is too aggressive and the current valuation is the highest among analyst coverage - expecting a 13 times P/B ratio in 2026. Rivian Automotive stock has fallen slightly by 0.3% since the beginning of the year, also receiving an "underweight" rating with a quant rating of 2.70. Analysis points out that with the expiration of the U.S. federal electric vehicle tax exemptions on September 30, 2025, demand could be significantly affected; at the same time, due to the adjustment to zero of Corporate Average Fuel Economy (CAFE) and greenhouse gas (GHG) compliance fines under the "One Big Beautiful Bill Act," other car companies used to buy "regulatory credits" from Rivian at a high price (almost 100% profit margin) to avoid fines, but now with the fines gone and buyers disappearing, this business model may be unsustainable. J.P. Morgan forecasts Rivian's revenue to be $5.3 billion in 2025, EBITDA loss of $2 billion, and a net cash outflow of $2.8 billion. Brown-Forman Corporation Class A-B stock has fallen by 26.7% year to date, receiving an "underweight" rating with a quant rating of 1.78. J.P. Morgan emphasizes that with structural pressure on global alcohol consumption, the company's core brand, Jack Daniel's bourbon, continues to lose market share, yet the stock still carries a premium of about 20% to peers, lacking reasonable support. Beyond Meat's stock has plunged by 42%, with an "underweight" rating and a quant rating of 1.13, as analysis shows a continuous decline in market share for its plant-based meat products, with the company in a state of loss and further deterioration of its balance sheet. Krispy Kreme's stock has plummeted by 65.5%, with an "underweight" rating and a quant rating of 1.11, mainly due to high leverage on the balance sheet impeding the recovery of its U.S. business, lack of visibility in EBITDA growth, and uncertainty in the execution cycle of international asset restructuring. Shake Shack's stock has fallen by 28.4%, receiving an "underweight" rating with a quant rating of 2.86, as analysis points out that its high pricing strategy limits expansion, needing to balance between high-end ingredient costs and customer breadth/frequency. The company has lowered its Total Addressable Market (TAM) guidance to find a balance between high prices and future customer breadth/frequency.