Nike

This is one of the most recognized and most valuable brands in the world, and a shift in production would be a gigantic move for the company. Nike Inc. (NYSE: NKE) designs, develops, markets and sells athletic footwear, apparel, equipment and accessories worldwide. The company offers Nike brand products in six categories, including running, Nike basketball, the Jordan brand, football, training and sportswear

The company also markets products designed for kids, as well as for other athletic and recreational uses, such as American football, baseball, cricket, golf, lacrosse, skateboarding, tennis, volleyball, walking, wrestling and other outdoor activities. It has apparel with licensed college and professional team and league logos.

Nike also sells a line of performance equipment and accessories comprising bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment for sports activities, as well as various plastic products to other manufacturers. Further, it provides athletic and casual footwear, apparel and accessories under the Jumpman trademark; casual sneakers, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks; and action sports and youth lifestyle apparel and accessories under the Hurley trademark.

The company posted stellar quarterly results, and the analysts said this:

Results in the quarter were significantly ahead of FactSet consensus, driven by stronger global sales and better margin delivery. Nike’s strong brand, ongoing innovation, and increasingly close consumer connection is driving significant momentum, evidenced by a faster recovery in sales and resilient digital growth trends even as stores reopen. Importantly, the effects of Nike’s efforts to accelerate its digital transformation and distribution strategy became increasingly evident this quarter.

Shareholders receive a 0.77% dividend. The $126 Goldman Sachs price target was raised to $140. The posted consensus target is $124.14. Nike stock was last seen trading at $127.11, up almost 9% on Wednesday.

Philip Morris International

This company has continued to grow global market share and its stock makes good sense for total return investors now. Philip Morris International Inc. (NYSE: PM) is one of the largest international cigarette producers, with a share of 28% of the international cigarette/heated tobacco market. Key combustible brands include Parliament, L&M and Marlboro, also one of the most valuable brands in the world.

The company is commercializing IQOS, a heat not burn product, in over 40 markets, which could drive earnings in the years to come. Most on Wall Street believe Philip Morris International offers superior underlying growth prospects, both near term and long term. The share price has been weak of late as investors have questioned the growth potential of its reduced risk products, and the overall market weakness has contributed. All of its sales are outside of the United States.

Goldman Sachs is very positive on the company and the IQOS initiatives:

We see a strong runway of accelerating revenue/profit growth ahead fueled by the tremendous compounding effect of iQOS based on our deep-dive analysis. Essentially, we expect the company’s base of iQOS users to increase to over 40 million by fiscal 2025 (up from 15.4 million users today, a ~20% CAGR) driven by accelerating conversion and stepped up innovation. Importantly, each 1 million new users consume ~5 billion iQOS heated tobacco units annually, which generate an incremental >$350 million in net revenue & >$200 million in op income annually, incl device sales & cannibalization effects – a very powerful razor/razor blade model.

Holders of Philip Morris stock receive a massive 6.36% dividend. The Goldman Sachs price target rose to $100 from $85 and compares with the $87.80 consensus target. Shares closed below both levels on Wednesday at $75.50.

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These four top companies are executing well and their stocks still look to have very solid upside to the Goldman Sachs price targets. These stocks are better suited for accounts with somewhat higher risk tolerance, as they could be a touch more volatile, given the solid runs they have all made.