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5 Goldman Sachs Conviction List Buys Have 100% or More Upside Potential
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When every rally attempt fails, market veterans know that it is likely that the path of least resistance for the stock market is lower, at least for the meantime. The recent preliminary reading of negative gross domestic product for the first quarter (the first such print since the second quarter of 2020) is a good sign that things could get worse before they get better.
The highest inflation in 41 years, the ongoing war between Russia and Ukraine, supply-chain issues and a host of additional woes continue to pressure the equity markets. Many investors are getting nervous, especially with the Nasdaq already dipping in and out of bear market status.
We decided to screen the Goldman Sachs Conviction List looking for ideas that aggressive investors with longer time horizons and a higher risk tolerance may want to consider. While there could still be downside to as low as 3,700 on the S&P 500, perhaps farther, the time to buy is when there is the proverbial blood in the street. That may not be far off.
While all five of the following stocks are Buy rated and are the top picks at Goldman Sachs, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This Wall Street favorite is a solid bio-pharma play. BioMarin Pharmaceuticals Inc. (NASDAQ: BMRN) develops and commercializes innovative biopharmaceuticals for serious diseases and medical conditions.
The company’s commercial products include the following:
The Goldman Sachs price target of $169 compares with a lower $116.39 consensus target for BioMarin Pharmaceuticals stock and Thursday’s closing print of $76.38. Hitting the Goldman Sachs target would be a 112% gain.
Investors looking for a blue-chip aerospace and defense idea can jump on this top stock. Boeing Co. (NYSE: BA) designs, develops, manufactures, sells, services and supports commercial jetliners, military aircraft, satellites and missile defense, human space flight and launch systems worldwide.
Its Commercial Airplanes segment provides commercial jet aircraft for passenger and cargo requirements, as well as fleet support services.
The Defense, Space & Security segment engages in the research, development, production and modification of manned and unmanned military aircraft and weapons systems; strategic defense and intelligence systems, which include strategic missile and defense systems, command, control, communications, computers, intelligence, surveillance and reconnaissance, cyber and information solutions and intelligence systems; and satellite systems, such as government and commercial satellites and space exploration.
The Global Services segment offers products and services, including supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and data analytics and digital services to commercial and defense customers.
The Boeing Capital segment offers financing services and manages financing exposure for a portfolio of equipment under operating leases, sales-type/finance leases, notes and other receivables, assets held for sale or re-lease, and investments.
Goldman Sachs has a $288 target price on Boeing stock, while the consensus target is around $228. The shares closed Thursday at $123.14, so hitting the Goldman Sachs target would be a 120% gain.
This is a name investors may not be as familiar with, but it holds tremendous upside potential. Datadog Inc. (NASDAQ: DDOG) engages in the development of monitoring and analytics platforms for developers, information technology operations teams and business users. The company’s platform integrates and automates infrastructure monitoring, application performance monitoring and log management to provide real-time observability of its customers’ entire technology stack.
Datadog announced last year the extension of Network Performance Monitoring (NPM) to Windows. Datadog NPM now monitors the performance of network communications between applications running on Windows Server and Linux, providing seamless network visibility across cloud environments, on-premises data centers and operating systems.
The Goldman Sachs price target on Datadog stock is $223. That compares with a $171.72 consensus estimate and Thursday’s final print of $98.83. Hitting the Goldman Sachs price objective would be a 126% gain.
This more off-the-radar idea has the biggest upside potential of all the Conviction List stocks. Qualtrics, International Inc. (NYSE: XM) operates an experience management platform to manage customer, employee, product and brand experiences worldwide. It was founded in 2002 and is headquartered in Provo, Utah. Qualtrics is a subsidiary of SAP America.
The company offers the Qualtrics Experience Management Platform, a system of action that guides users with specific instructions for improvement and automated actions to improve experiences, as well as for listening, understanding and taking action on both structured and unstructured data.
Qualtrics also provides professional services that primarily consist of research services, through its DesignXM, which allows customers to gain market intelligence, as well as implementations, configurations and integration and engineering services to help customers deploy its XM Platform.
The $40 Goldman Sachs price target and the $36.53 consensus target are well above Thursday’s closing share price of $14.91. Qualtrics stock hitting the Goldman Sachs target would make it a 156% winner.
This top stock is another solid idea for those leaning toward software and technology. Salesforce Inc. (NYSE: CRM) provides customer relationship management technology that brings companies and customers together worldwide. Its Customer 360 platform empowers its customers to work together to deliver connected experiences for their customers.
The company’s service offerings include:
Salesforce provides its Service offerings for customers in financial services, health care and life sciences, manufacturing and other industries. It also offers professional services, as well as in-person and online courses to certify its customers and partners on architecting, administering, deploying and developing its service offerings. The company provides its services through direct sales and via consulting firms, systems integrators and other partners.
Goldman Sachs has set a $340 price target. The consensus target is lower at $289.68. Salesforce stock closed at $160.42 on Thursday, so hitting the Goldman Sachs price target would be a 105% gain.
All five of these stocks are presented with the strong caveat, yet again, that the selling may not be over. With that firmly in mind, nibbling and starting to add partial positions over the next few months makes sense, then filling out full positions when there is a complete and final washout.
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
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