Goldman Sachs Newest Favorite Stocks for Serious Upside in 2019

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Synchrony Financial (NYSE: SYF) was raised to Buy from Neutral with a $38 price target back on February 14. The stock closed at $31.21 ahead of that call, and the shares more recently traded at $32.50. This still represents about 17% upside, before factoring in the dividend yield for the total return.

Synchrony Financial has a 52-week range of $21.77 to $37.57, with a consensus analyst target of $36.74. The dividend yield is 2.6%. It’s a total implied upside projection of 20% if the analyst call pans out here.

Yelp Inc. (NYSE: YELP) was an early February call, with the firm initiating coverage with a Buy rating and a $42 price target. The prior close was $37.17. Yelp’s shares did trade as high as $40.78 by February 15, but there were last seen trading back around the $37.15 level on Friday, March 1. This call represents about 14% in implied upside from the current level.

Yelp has a 52-week range of $29.33 to $52.50 and a consensus price target of $39.74. It pays no dividend at this time.

24/7 Wall St. has seen four additional analyst calls that would have fit the bill here as top Goldman Sachs picks for 2019, but the problem is that these stocks already managed to reach their objectives in a very short time.

Avalara Inc. (NYSE: AVLR) is proof that Goldman Sachs can see its targets get hit. The firm issued a new Buy rating and assigned a $50 price target on February 1, 2019. Its shares traded at $39.87 ahead of the call, but the price this past Friday was $51.89, and that was even after a small drop for the day.

Avis Budget Group Inc. (NASDAQ: CAR) was given a rare two-notch analyst upgrade from Sell to Buy, and the price target was raised to $35 from $30 on February 11. Its shares had traded at $25.68 at the time, implying a Goldman Sachs upside of 36%, but the stock was last seen trading up at $36.00 after earnings.

In a world dominated by Uber and Lyft, Goldman Sachs still sees a strong rent car scenario here, considering that rental car companies have even gotten into the game of renting to part-time drivers rather than them having to buy their own cars and allowing the ride-captains to avoid having any vehicle maintenance costs. Avis has a 52-week range of $21.63 to $50.88 and a consensus price target of $43.00.

MercadoLibre Inc. (NASDAQ: MELI) is another call that already has come and gone. Goldman Sachs started coverage as Buy with a $438 price target on February 5, compared to a previous close at $368.08. After earnings, the shares skyrocketed up to $462.00, before pulling back down to $448.50 late on Friday.

MercadoLibre has a 52-week range of $257.52 to $474.84. The consensus price target is $413.25.

Zynga Inc. (NASDAQ: ZNGA) was also an example of Goldman Sachs nailing its call in February. On January 30, the firm issued a new Buy rating and initiated the stock with a $5.30 share price. That represented some 16% upside at the time, and Zynga shares were trading at exactly $5.30 on Friday, March 1.

Rio Tinto PLC (NYSE: RIO) is an example of Goldman Sachs deciding to make a change in its coverage rather quickly. The firm raised the metals and mining giant to Buy from Neutral on February 12, and it was then reportedly downgraded back to Neutral on February 27.

The precall price was $55.78 before the Buy rating, and shares traded at $58.25 late on Friday. Rio Tinto has a 52-week range of $44.62 to $60.72 and a consensus price target of $62.12. The stock has a dividend yield of 4.4%.

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As a reminder, investors should consider that not all analyst calls play out as the baseline scenario would have implied. Sometimes analysts have no better information or knowledge on a company than the rest of us, and sometimes they just end up being wrong.