As October kicks off and market participants enter the fourth quarter of 2025, JPMorgan surveyed its top-ranked U.S. equity analysts and picked out what it called “their most compelling structural and tactical short ideas” across sectors.
Looking at the consumer sector (NYSEARCA:XLY)(NYSEARCA:XLP), JPMorgan identified six top short ideas: Southwest Airlines (NYSE:LUV), Rivian Automotive (NASDAQ:RIVN), Brown-Forman (NYSE:BF.B), Beyond Meat (NASDAQ:BYND), Krispy Kreme (NASDAQ:DNUT), and Shake Shack (NYSE:SHAK).
The two subsets of the S&P 500 consumer sector have significantly differed in terms of performance this year. The heavyweight consumer discretionary growth sector (NYSEARCA:XLY) has advanced +5.06% YTD. On the other hand, the defensive consumer staples sector (NYSEARCA:XLP) is down slightly, -0.55% YTD.
See below JPMorgan’s rationale behind its six top consumer short ideas and their rating. Also given are the stocks’ YTD performance and their Seeking Alpha Quant rating:
Southwest Airlines (NYSE:LUV)
Stock -3.7% YTD; JPMorgan’s rating: Underweight; Quant rating: Hold, 2.91.
Rationale: An airline in the early innings of a transformative shift away from its core longstanding brand (at the behest of Elliot Management). LUV has the most ambitious implied 4Q guide in our coverage and while demand appears to be trending in right direction, it is also the most expensive name in our group (P/E of 13x on JPMe2026).
Rivian Automotive (NASDAQ:RIVN)
Stock -0.3% YTD; JPMorgan’s rating: Underweight; Quant rating: Hold, 2.70.
Rationale: Rivian is likely to face materially lower demand for its electric vehicles after the expiration on September 30, 2025 of $7,500 U.S. federal tax credits. Also, the “One Big Beautiful Bill Act” passed in July harms them in another way: they are unlikely to be able to continue to sell 100% margin automotive regulatory credits to other automakers after the penalties for non-compliance with Corporate Average Fuel Economy (CAFE) and greenhouse gas (GHG) regulations were reduced to zero. It has only been through the sale of these credits that Rivian has ever managed to report a positive quarterly gross margin. We forecast the company to generate an EBITDA loss of -$2.0 bn in 2025 on $5.3 bn of revenue while generating a free cash outflow of -$2.8 bn.
Brown-Forman (NYSE:BF.B)
Stock -26.7% YTD; JPMorgan’s rating: Underweight; Quant rating: Sell, 1.78.
Rationale: Alcohol consumption remains under pressure worldwide, and we see this trend as more structural than cyclical. Despite these concerns and share losses in the core Jack Daniel’s bourbon, BF/B shares still trade at ~20% premium to peers which we believe is unwarranted.
Beyond Meat (NASDAQ:BYND)
Stock -42% YTD; JPMorgan’s rating: Underweight; Quant rating: Strong Sell, 1.13.
Rationale: We see eroding market share in a declining category. Unprofitable company with a worsening balance sheet.
Krispy Kreme (NASDAQ:DNUT)
Stock -65.5% YTD; JPMorgan’s rating: Underweight; Quant rating: Strong Sell, 1.11.
Rationale: Overburdened balance sheet weighs on US recovery, and we see limited EBITDA growth visibility to improve net/bank leverage; duration risk on executing international asset refranchising.
Shake Shack (NYSE:SHAK)
Stock -28.4% YTD; JPMorgan’s rating: Underweight; Quant rating: Hold, 2.86.
Rationale: We see high absolute menu prices and are cautious around broadening away from top-tier ingredient suppliers. Lower than guided TAM to balance high price points with future customer breadth/frequency.