Investing

Goldman Sachs Starts Coverage on 4 Sizzling Stocks to Buy Now

Foot Locker

This athletic shoe retailer has rallied from lows and looks ready to move higher. Foot Locker Inc. (NYSE: FL) is an athletic footwear and apparel retailer in North America, Europe and Asia. The company’s banners include Foot Locker, Champs Sports, FootAction, Kids Foot Locker, Lady Foot Locker, SIX:02 and Eastbay.

Many Wall Street analysts feel that consumers are bearing price increases from the top companies like Nike, Reebok and Adidas. They also say that currently athletic apparel and footwear companies are continuing to see higher gross margins and return on invested capital, which some think will be a source of multiple expansion.

Goldman Sachs noted this when it started coverage on the popular retailer:

We are initiating on Foot Locker (FL) with a Buy rating based on:

1) Foot Lockers strong omni channel presence,

2) A solid pipeline of new fashion and innovation allowing for pricing power and top line growth,

3) Ongoing real estate rationalization driving higher sales per square foot,

4) Likely ongoing share consolidation from undifferentiated competitors,

5) Unique differentiators and drivers like Power Stores and growth investments in emerging companies, and vi) an attractive valuation.

Foot Locker stock investors receive a 1.37% dividend. The $70 Goldman Sachs price target is right in line with the $70.05 consensus target. The stock closed trading on Friday at $58.37 per share.

IronSource

This company is in one of the hottest sector silos now, and the stock has outstanding potential. IronSource Ltd. (NYSE: IS) operates a business platform for app developers and telecom operators.

The company’s platforms include Sonic solution suite that supports developers to launch, monetize and scale their apps and games by providing solutions for app discovery, user growth, content monetization, analytics and publishing. Its Aura solution suite allows telecom operators to enrich the device experience by creating new engagement touchpoints that deliver relevant content for their users across the entire lifecycle of the device.

The analyst said this:

IronSource should benefit from growth in the mobile app market, driving increased spend by existing and new customers. New product innovation in user acquisition, monetization, and publishing should help to drive market share gains. Sonic Publishing (Supersonic), ironSource’s publishing-as-a-service business, helps independent developers publish games and recent successes (e.g., Bridge Race, Going Balls) could provide additional upside risk to estimates.

Goldman Sachs has set an $11 price target. This is another company that recently went public via the SPAC route, so there is no consensus price target yet. Since the conversion, the shares have traded between $7.80 and $11.25. Friday’s final trade was reported at $8.80 a share.


These are four stocks that recently received a Buy rating from Goldman Sachs analysts and have very promising upside. While they are better suited for aggressive growth investors, buying shares now could offer some outstanding alpha potential going forward.

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