Stocks are hitting record highs right now. All three major indexes surged this week following Fed Chair Jerome Powell’s strong rate cut signals. The S&P 500 closed on Friday above 3,000 for the first time, while the Dow Jones Industrial Average also enjoyed its first close above 27,000 on Thursday. Meanwhile the Nasdaq Composite ended the week up 1% at 8,244.
But even at these elevated levels, it’s still possible to find stocks with significant upside potential for the months ahead. Goldman Sachs analyst Heath Terry has a top-notch reputation when it comes to stock picking. As we can see from TipRanks, the five-star analyst is ranked #130 out of over 5,242 tracked analysts.
And according to Terry, there are still stocks primed to outperform. Indeed, the following three stocks all have over 20% upside potential ahead. That’s based on the stock’s current share price vs the analyst’s price target. Let’s take a closer look at what’s driving this bullish sentiment now:
Stitch Fix Inc (SFIX)
reiterate stock ratings- so when a stock is upgraded or downgraded, it’s worth
taking note. On July 12 Terry upgraded online personal styling service SFIX
from Hold to Buy. His $38 price target indicates upside potential of 37%.
Shares soared 5% following Terry’s recommendation.
StitchFix, we believe product innovation, operational efficiencies, and
geographic expansion, combined with the increase in retail store closures
(particularly in apparel) represent significant opportunities for further
outperformance,” stated the analyst. The company’s unique model involves delivering
hand-selected clothing and accessories to customers for a deductible $20
Terry believes the stock shows “compelling upside potential” especially as it expands into several key markets. These include plus-size, kids’ and men’s clothing- as well as making its UK debut in May this year.
The Street has a cautiously optimistic Moderate Buy SFIX consensus. However, the $37 average analyst price target still suggests 34% upside potential lies ahead. This is based on all the ratings received by a stock over the last three months.
Netflix Inc (NFLX)
Netflix is another top stock on Terry’s buy list. With a $460 price target, the
analyst is forecasting 23% upside potential for shares.
Netflix also features on Goldman Sachs’ prized Conviction Buy List. The list
comprises of stocks the firm expects to outperform based on either the size of
the potential return or the likelihood of the return.
“We continue to believe Netflix’s investment in content, technology and distribution will continue to drive subscriber growth well above consensus expectations both in the U.S. and internationally,” Terry told investors earlier this year when he added the stock to the firm’s Conviction list.
that Netflix “represents one of the best risk/reward propositions in the
Internet sector” with the market significantly underestimating Netflix’s increasingly
‘robust’ original content.
the analyst met up with with Netflix CFO Spencer Neumann, who sees further opportunities
for subscriber growth both geographically and in terms of content investment. Plus
the CFO reaffirmed to Terry that Netflix expects to start reducing its annual
cash burn in 2020.
can see that the Street has a bullish Strong Buy consensus on Netflix stock.
The $419 price target indicates 12% upside potential from current levels.
Uber Technologies Inc (UBER)
Last but not least we have ride-hailing service Uber Technologies. Despite a disastrous market launch back in May, Uber is nonetheless a top stock pick for Goldman Sachs. Indeed, Terry initiated coverage of Uber with a buy rating and $56 price target. Given that Uber shares have only climbed 6%, the price target still indicates compelling upside potential of 27%.
The analyst offered
these words of wisdom to investors: “Uber is the category leader creating what
has become a disruptive and challenging market over the course of the last
eight years. While we see mobility as a massive opportunity, the path to
reaching it is far from a straight line.”
As Terry notes,
there are already very large companies across the various markets and services.
“We see long-term leadership in the space as far from settled and believe the
risks in ownership across the space, as both the services and the competitors
with in them mature, are significant” he cautions. But the bottom line is
firmly optimistic: “the risk/reward in owning the leader in this space remains
favorable and [we] initiate coverage of Uber with a Buy rating”
the analyst concludes.
Taking a step back we can see that Uber shows a Moderate Buy consensus from the Street. Its $54 average analyst price target works out at 22% upside potential.
The post Goldman Sachs: These 3 Stocks Have Over 20% Upside Ahead appeared first on TipRanks Financial Blog.
Source: TipRanks Blog