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Goldman Sachs Thinks This Out-of-Favor Sector Has Huge Upside Potential for 2021

Goldman Sachs feels Starbucks is another technology leader:

We believe Starbucks will be a key beneficiary of the economic re-opening in 2021 as consumers revert to more normalized work routines, mobility and travel return to urban centers, and the company benefits from its digital leadership. We also see benefits from the company’s shift towards suburban markets (drive-thrus) and smaller footprint locations in urban centers.

Shareholders receive a 1.71% dividend. The $115 Goldman Sachs price objective is greater than the $105.62 consensus target. Starbucks stock closed at $105.46 on Wednesday.

Wingstop

This stock has solid upside potential, and with the NFL playoffs in full swing, you can bet the orders will continue to skyrocket. Wingstop Inc. (NASDAQ: WING) operates and franchises more than 1,300 locations worldwide. The company is dedicated to serving the world flavor through an unparalleled guest experience and offering of classic wings, boneless wings and tenders, always cooked to order and hand-sauced-and-tossed in fans’ choice of 11 bold, distinctive flavors. Wingstop’s menu also features signature sides including fresh-cut, seasoned fries and freshly made ranch and bleu cheese dips.

Goldman Sachs has been very bullish on the shares for some time and said this:

We believe Wingstop is still in the early innings of a long-term growth story as the company has a strong, digitally-focused foundation to support unit growth. Wingstop is 98% franchised with just ~1,500 units globally (1,300 domestic, ~200 international) with some of the best unit-level economics the industry lending support to franchisee demand. We acknowledge that same-store-sales trends in 2021 will likely be challenged by the strong year-over-year comparisons, but we continue to focus on the long-term prospects in this high-growth, asset light model. We see a long runway for unit growth — both domestically and internationally — and believe valuation still looks attractive on a growth-adjusted basis.

Goldman Sachs has set a $165 price objective. The consensus target price is $149.95, and the last trade for Wingstop stock on Wednesday was at $152.48 a share.


Goldman Sachs These four stocks have all been reasonably strong but still have double-digit upside potential for 2021. In addition, with the market fully valued, and the possibility for a pullback in the cards, these all act somewhat defensively when the going gets tough. That is a huge positive for those wanting to stay invested but nervous about the lofty market levels.

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