3 Overvalued Stocks to Avoid in September

Recommendations

Entry is the asset's closing price on the publication date. Current is the last close on record.

1. 01 STX NASDAQ SELL +0.00%
   Entry $783.18 16 Sep 2026

   Current $783.18 16 Sep 2026

   Result +$0.00

   vs. index +0.0% SPY +0.0% over the same days

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   Surrounding source transcript

   …r discretionary stocks to struggle most. His stocks to avoid were SanDisk, Ciena, and Brinker. Today, we're sharing three more stocks to avoid this month. These overvalued and consumer stocks could be vulnerable in a stock market downturn. Our first overvalued stock to avoid this month is Seagate Technology. Last quarter, the company shattered its own records for gross margin and operating margin, and its guidance suggests the artificial intelligence-driven storage cycle is still accelerating. This maker of disk drives remains tricky to value …

   Our first overvalued stock to avoid this month is Seagate Technology.

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   AI-extracted context Hi, I'm Susan Jabinski, co-host of the Morningstar Filter podcast. On a recent episode, Morningstar Chief US Markets Strategist Dave Sekera said that September is historically the worst month for stocks. If we were to experience a stock market sell-off, he'd expect overpriced tech stocks and consumer discretionary stocks to struggle most. His stocks to avoid were SanDisk, Ciena, and Brinker. Today, we're sharing three more stocks to avoid this month. These overvalued and consumer stocks could be vulnerable in a stock market downturn. Our first overvalued stock to avoid this month is Seagate Technology. Last quarter, the company shattered its own records for gross margin and operating margin, and its guidance suggests the artificial intelligence-driven storage cycle is still accelerating.

2. 02 CAVA NYSE SELL +0.00%
   Entry $49.76 16 Sep 2026

   Current $49.76 16 Sep 2026

   Result +$0.00

   vs. index +0.0% SPY +0.0% over the same days

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   Surrounding source transcript

   … to experience material pricing erosion. But for now, we think Seagate has a clear path to an earnings compound annual growth rate above 30% for years. Even so, the stock trades well above our $700 fair value estimate and looks overvalued. Our second overpriced stock to avoid is Cava Group. The fast-casual chain's Mediterranean bowl concept has resonated with consumers, driving 41% average annual system sales growth over the past 7 years. But in an industry with low switching costs and low barriers to entry, we don't think Ca…

   Our second overpriced stock to avoid is Cava Group.

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   AI-extracted context Even so, the stock trades well above our $700 fair value estimate and looks overvalued. Our second overpriced stock to avoid is Cava Group. The fast-casual chain's Mediterranean bowl concept has resonated with consumers, driving 41% average annual system sales growth over the past 7 years. But in an industry with low switching costs and low barriers to entry, we don't think Cava has carved out an economic moat.

3. 03 DRI NYSE SELL +0.09%
   Entry $208.26 16 Sep 2026

   Current $208.08 16 Sep 2026

   Result +$0.18

   vs. index +0.1% SPY +0.0% over the same days

   Cite this call · Watch source segment (118s) *

   Surrounding source transcript

   …at investors are overestimating Cava's ability to rapidly expand its footprint and underestimating the costs required to maintain its value proposition. We assign Cava stock an $18 fair value estimate, and shares trade way, way above that. Our final pricey stock to avoid is another restaurant name, Darden Restaurants. The largest full-service dining operator globally, Darden's portfolio includes the brands Olive Garden and LongHorn Steakhouse, as well as fine dining's Capital Grille and Ruth's Chris, among others. We think the company has carved out a n…

   Our final pricey stock to avoid is another restaurant name, Darden Restaurants.

   Go

   AI-extracted context We assign Cava stock an $18 fair value estimate, and shares trade way, way above that. Our final pricey stock to avoid is another restaurant name, Darden Restaurants. The largest full-service dining operator globally, Darden's portfolio includes the brands Olive Garden and LongHorn Steakhouse, as well as fine dining's Capital Grille and Ruth's Chris, among others.