Wall Street doesn’t always get it right.
In fact, it’s always good practice to take analyst opinions with a golf ball-sized grain of salt. That said, Wall Street firms with solid track records can be a useful source of buy ideas.
Let’s look at three stocks that investment giant Goldman Sachs has recently taken a bullish stance on.
One of them could very well be your next big money-maker.
1. Weber
Leading off our list is grill maker Weber, which Goldman started coverage on with a Buy rating Monday. Along with the bullish stance, Goldman analyst Kate McShane planted a $22 price target on the shares, representing upside of about 33% from where they sit now.
With the trend of investing in the home only picking up pace, McShane thinks Weber is a “solid growth story.” The analyst also sees the company benefitting from consumer brand awareness and global growth tailwinds.
In 2020, the company posted revenue of $1.5 billion with a solid return on invested capital of 14%.
Weber shares quickly spiked after their IPO earlier this month, but have fallen 17% since the initial run-up, providing a possible opportunity for contrarian traders.
2. Workday
Next up, we have cloud computing technologist Workday, which Goldman raised its price target on from $300 to $330 per share. In other words, Goldman analyst Kash Rangan sees upside of about 20% from where Workday currently trades.
Rangan also reiterated his Buy rating on the stock.
In a research note to investors, Rangan wrote that Workday is well-positioned to take market share over the long haul even as the exact timing of its large financial migrations remains unclear.
In its Q2 results last week, Workday blew out expectations with revenue growth of 19%. The company also posted non-GAAP earnings of $1.23 a share, well above the average analyst estimate of 78 cents a share.
Workday shares are up just 13% so far in 2021 versus 21% for the S&P 500.
3. Snowflake
Rounding out our list is cloud-based data platform Snowflake, which Goldman’s Rangan lifted his price target on from $300 to $340. Rangan’s projection represents 14% worth of upside for today’s buyers of Snowflake shares.
Rangan thinks Snowflake’s native cloud platform is ideally positioned to replace data warehousing services over the long haul due to its scalability and elasticity. Rangan also highlighted the company’s “best in class” net revenue retention rate of 169% in the most recent quarter.
While Snowflake posted a wider-than-expected loss in Q2, revenue more than doubled from the year-ago period to $272 million.
Snowflake shares are up 6% year to date, underperforming the S&P 500 by a wide margin, suggesting that the stock could have plenty of room to run for the rest of 2021.
Go your own way?
There you have it: three newly upgraded stocks worth checking out.
Even if you don’t agree with Goldman on these specific stock picks, your goal as investor should always remain the same: seeking out attractive assets at discounted prices.
You don’t have to limit yourself to the stock market, either.
One attractive asset that billionaire Bill Gates is partial to is investing in U.S. farmland.
In fact, Gates is America’s biggest owner of farmland and for good reason: Over the years, agriculture has been shown to offer higher risk-adjusted returns than both stocks and real estate.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
