Goldman Sachs names 40 stocks to buy before they surge to meet its higher price targets – including 5 with more than 50% upside

  • Markets saw a strong start to the 2Q, with the S&P 500 closing above 4000 on April 1. 
  • However, Goldman Sachs says the index will climb just 5% to 4300 by year-end.
  • The bank named 40 shares with more than 20% upside to their own targets 
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  • See more stories on Insider’s business page.

Markets saw a strong start to the second quarter. The S&P 500 rose to a record high on April 1 and surpassed 4,000 points for the first time on the back of increased confidence in the economy that stemmed from vaccinations and Biden’s infrastructure plan. 

During the first quarter, all 11 stock-market sectors saw gains. Cyclicals were the biggest winners, with the energy, financials, and industrial sectors posting double-digit gains during that period given that they are closely correlated with the fluctuations of the economy. And although the utilities, tech, and consumer staples areas still enjoyed some returns, they ended up performing the worst. 

However, since reaching record highs, stocks have proceeded to trade in a flat manner. But that might change soon enough as earnings season kicks off this week with big banks like JPMorgan and Bank of America sharing their financial reports with investors. 

Investors assess earnings to determine a company’s profitability and use earnings per share as a metric to estimate its valuation. And analysts are expecting S&P 500 companies to post a 6% rise in bottom-up per-share earnings, according to FactSet. 

FactSet Senior Earnings Analyst John Butters said 61 S&P 500 companies have issued positive first-quarter guidance, up from the five-year average of 35. Earnings, on average, are expected to come in at $39.86 per share.

And while many names are expected to report attractive earnings, Goldman Sachs believes there are some that could boom and pleasantly surprise investors and analysts. 

In a recent note to clients, David Kostin, Goldman’s head of US equity strategy, said the bank is forecasting the S&P 500 will rise just 5% to 4300 by year-end. That could make finding names that have the potential to skyrocket higher a challenging task.

Nevertheless, Kostin and his team laid out 40 stocks they believe can rise substantially — and all of them have more than 20% upside. They are listed below in descending order of upside, and we have included their corresponding tickers, prices as of March 31, and upsides to Goldman’s price targets.

1. Regeneron Pharmaceuticals

Ticker: REGN

Price: $473

Upside to GS target: 68%

Source: Goldman Sachs 

2. Incyte

Ticker: INCY

Price: $81.3

Upside to GS target: 67.3%

Source: Goldman Sachs 

3. ViacomCBS

Ticker: VIAC

Price: $45

Upside to GS target: 66.3%

Source: Goldman Sachs 

4. Enphase Energy

Ticker: ENPH

Price: $162.2

Upside to GS target: 62.8%

Source: Goldman Sachs 

5. Vertex Pharmaceuticals

Ticker: VRTX

Price: $214.9

Upside to GS target: 58.2%

Source: Goldman Sachs 

6. salesforce.com

Ticker: CRM

Price: $211.9

Upside to GS target: 48.7%

Source: Goldman Sachs 

7. Penn National Gaming

Ticker: PENN

Price: $104.8

Upside to GS target: 46%

Source: Goldman Sachs 

8. ServiceNow

Ticker: NOW

Price: $500

Upside to GS target: 39%

Source: Goldman Sachs 

9. Merck & Co

Ticker: MRK

Price: $77

Upside to GS target: 39%

Source: Goldman Sachs 

10. Micron Technology

Ticker: MU

Price: $88.2

Upside to GS target: 38.3%

Source: Goldman Sachs 

 

11. Eli Lilly

Ticker: LLY

Price: $186.8

Upside to GS target: 37%

Source: Goldman Sachs 

12. Bristol-Myers Squibb

Ticker: BMY

Price: $63.1

Upside to GS target: 36.2%

Source: Goldman Sachs 

13. Arista Networks

Ticker: ANET

Price: $301.9

Upside to GS target: 36.1%

Source: Goldman Sachs 

14. NRG Energy

Ticker: NRG

Price: $37.7

Upside to GS target: 35.2%

Source: Goldman Sachs 

15. Advanced Micro Devices

Ticker: AMD

Price: $78.5

Upside to GS target: 35%

Source: Goldman Sachs 

16. Microsoft

Ticker: MSFT

Price: $235.8

Upside to GS target: 33.6%

Source: Goldman Sachs 

17. Devon Energy

Ticker: DVN

Price: $21.9

Upside to GS target: 32.7%

Source: Goldman Sachs 

18. Thermo Fisher Scientific

Ticker: TMO

Price: $456.38

Upside to GS target: 31.5%

Source: Goldman Sachs 

19. Take-Two Interactive Software

Ticker: TTWO

Price: $176.70

Upside to GS target: 31.3%

Source: Goldman Sachs 

20. Alaska Air

Ticker: ALK

Price: $69.21

Upside to GS target: 30%

Source: Goldman Sachs 

21. United Airlines

Ticker: UAL

Price: $57.54

Upside to GS target: 28.6%

Source: Goldman Sachs

22. FedEx

Ticker: FDX

Price: $284.04

Upside to GS target: 28.5%

Source: Goldman Sachs

23. FMC

Ticker: FMC

Price: $110.61

Upside to GS target: 28.4%

Source: Goldman Sachs

24. Align Technology

Ticker: ALGN

Price: $541.53

Upside to GS target: 28.3%

Source: Goldman Sachs

25. Edison International

Ticker: EIX

Price: $58.60

Upside to GS target: 28%

Source: Goldman Sachs

26. Western Digital

Ticker: WDC

Price: $66.75

Upside to GS target: 27.3%

Source: Goldman Sachs

27. Zoetis

Ticker: ZTS

Price: $157.48

Upside to GS target: 27%

Source: Goldman Sachs

28. Citizens Financial Group

Ticker: CFG

Price: $44.15

Upside to GS target: 26.8%

Source: Goldman Sachs

29. TE Connectivity

Ticker: TEL

Price: $129.11

Upside to GS target: 26.2%

Source: Goldman Sachs

30. Exelon

Ticker: EXC

Price: $43.74

Upside to GS target: 25.7%

Source: Goldman Sachs

31. Electronic Arts

Ticker: EA

Price: $135.37

Upside to GS target: 25.6%

Source: Goldman Sachs

32. Prologis

Ticker: PLD

Price: $106

Upside to GS target: 25.5%

Source: Goldman Sachs

33. Aptiv PLC

Ticker: APTV

Price: $137.90

Upside to GS target: 25.5%

Source: Goldman Sachs

34. Walmart

Ticker: WMT

Price: $135.83

Upside to GS target: 25.2%

Source: Goldman Sachs

35. Tesla

Ticker: TSLA

Price: $667.93

Upside to GS target: 25%

Source: Goldman Sachs

36. PerkinElmer

Ticker: PKI

Price: $128.29

Upside to GS target: 24.7%

Source: Goldman Sachs

37. ConocoPhillips

Ticker: COP

Price: $52.97

Upside to GS target: 24.6%

Source: Goldman Sachs

38. Realty Income

Ticker: O

Price: $63.50

Upside to GS target: 24.4%

Source: Goldman Sachs

39. Colgate-Palmolive

Ticker: CL

Price: $78.83

Upside to GS target: 24.3%

Source: Goldman Sachs

40. Zimmer Biomet Holdings

Ticker: ZBH

Price: $160.08

Upside to GS target: 24.3%

Source: Goldman Sachs

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