Goldman added these stocks to its conviction list — giving them more than 50% upside
Goldman Sachs recently added a number of stocks to its lists of top picks, and a number of them were given significant upside. Called the “Conviction List – Directors’ Cut,” the lists encompass the United States, Europe and Asia-Pacific. Those lists are the bank’s “curated and active” picks of between 15 and 30 top buy-rated stocks for each region. The names are selected by a subcommittee designated by the bank’s Investment Review Committee for each region. “The subcommittee will collaborate with each sector analyst to identify top ideas that offer a combination of conviction, a differentiated view and high risk-adjusted returns,” Goldman said. Here are five of them with more than 50% upside, with all price targets for the 12 months from December 2023. WW International U.S.-headquartered weight loss services company WW International , known as Weight Watchers, aims to capitalize on the increased demand for anti-obesity medication, Goldman noted. “WeightWatcher’s subscriber base and earnings power has been shrinking, but the company has reembarked on an aggressive strategy to turn things around,” the bank said. “[Goldman] believes WW’s new obesity drug on-ramp solution could be the catalyst for a turnaround, especially when combined with WeightWatchers’ trusted brand recognition and deep existing and former customer base.” Goldman noted that 42% of the U.S. population is obese — suggesting that the insurance authorization for weight loss drugs is likely to grow. Capturing as little as 3% of this market could add $2 to WW’s earnings per share, said the bank. Goldman gave the stock a price target of $18, implying potential upside of 105%. First Solar The U.S. solar panel manufacturer is “ideally positioned” to benefit from U.S. Inflation Reduction Act incentives, said Goldman. “And FSLR’s track record of being a key supplier to utility scale solar farms should provide investors with confidence that it can execute against now-high expectations,” the bank said. Goldman believes First Solar’ s core gross margins are set to have upside on the back of pricing power and cost reductions, among other factors. The bank gave the stock a price target of $275, or potential upside of 59%. Burberry Goldman believes the brand’s trajectory is turning more positive, supporting its prediction for gains in Burberry ‘s market share. Compared with its peers in the luxury sector, Burberry is trading at an estimated price-to-earnings multiple of 14 times this year, higher than the group’s 19 times, Goldman estimated. The bank gave Burberry a price target of 2500 pence, or potential upside of 75%. Stocks in the U.K. trade in pence. As for other European stocks, Goldman also picked sportswear brand Puma , giving it a price target of 85 euros ($93), or around 68% upside. Kuaishou Technology Hong Kong-listed Kuaishou Technology is China’s second-largest short-form video provider, and Goldman forecast it will deliver 16% year-on-year revenue growth in both 2024 and 2025. The bank added that its valuation remains “undemanding” for its expected earnings growth in those two years. It gave the stock a price target of 88 Hong Kong dollars ($11.26), implying upside of 70%. — CNBC’s Michael Bloom contributed to this report.
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