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5 Goldman Sachs Conviction List Stocks Have Gigantic Implied Upside
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With 2019 well underway, and the first quarter almost over, many investors are resetting for what could be a more volatile rest of the year as the ongoing trade issues could continue to stir the pot. While the rally of the past three months has been positive, it makes sense for investors to find the best possible stock ideas from the top analysts and firms.
One of Wall Street’s most respected lists of stocks is the Goldman Sachs Conviction List of companies. These are the firm’s top picks for high net worth and institutional accounts, spread across 10 sectors. We screened the list looking for the companies that had among largest upside to the Goldman Sachs assigned target prices. We found five that aggressive accounts may want to add to portfolios.
BioMarin Pharmaceuticals
This stock is a Wall Street favorite, and the company posted solid earnings last year. BioMarin Pharmaceuticals Inc. (NASDAQ: BMRN) develops and commercializes innovative biopharmaceuticals for serious diseases and medical conditions. Its product portfolio comprises five approved products and multiple clinical and preclinical product candidates.
Over the past decade, BioMarin has become one of the top orphan drug companies, and it looks poised to stay there. Roche recently has been mentioned as a company that could be looking at BioMarin. Roche is heavily focused on oncology drugs and invests heavily in early-stage molecules.
The Goldman Sachs price objective for the shares is $167, while the Wall Street consensus price target was last seen at $119.87. The stock closed trading on Tuesday at $91.44 a share, so the implied upside to the Goldman Sachs target is right at 75%.
Cigna
This is a solid value buy in the health care sector. Cigna Corp. (NYSE: CI) is a major health services organization that provides insurance and related products and services in the United States and internationally. All products and services are provided exclusively by or through operating subsidiaries of Cigna, including Cigna Health and Life Insurance Company, Life Insurance Company of North America, Cigna Life Insurance Company of Canada and their affiliates.
The health care giant offers an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits and other related products, including group life, accident and disability insurance. Cigna maintains sales capability in 30 countries and jurisdictions, and it has approximately 86 million customer relationships throughout the world.
Goldman Sachs has its price target set at $250, and the posted consensus target is $240.64 a share. The stock closed trading on Tuesday at $172.79, up over 3% on the day. The upside to the firm’s target is just about 50%.
24/7 Wall St.DXC Technology
This company may be somewhat off the radar for investors, but it is well liked across Wall Street. DXC Technology Co. (NYSE: DXC) is the world’s second-largest pure-play information technology (IT) services firm, behind only Accenture, and it generated around $25 billion in annual revenues.
The company has more than 170,000 employees (with an offshore mix of around 50%) and services around 6,000 clients in a wide range of verticals, and it has a presence in over 70 countries, with the Americas representing around 50% of total revenues.
DXC Technology shareholders are paid a small 1.14% dividend. The $106 Goldman Sachs price target is well above the $85.44 consensus of analysts. The shares closed trading on Tuesday at $66.39, and hitting the Goldman Sachs target would be a 60% gain.
EOG Resources
This leading energy company shows up well on many Wall Street screens. EOG Resources Inc. (NYSE: EOG) is one of the largest independent exploration and production companies operating in the United States, Canada, Trinidad, the United Kingdom and China.
The company has a big well in Loving County in the Delaware Basin. Top analysts say the well ranks as one of the best they have ever seen in the basin, and it could easily impact other companies drilling in the region. EOG’s average dollar gross per well on a yearly basis ranks third among all operators.
Shareholders of EOG are paid a small 0.95% dividend. Goldman Sachs has a price target of $128. The posted consensus price target $120, and the stock closed trading most recently at $92.88 a share. Matching the target price would be a 45% gain for investors.
Tapestry
This retail idea offers some serious total return upside potential. Tapestry Inc. (NYSE: TPR) is a leading specialty retailer positioned in an appealing segment of the market (affordable luxury). Tapestry is comprised of the Coach, Kate Spade and Stuart Weitzman brands and is best known for accessories, especially handbags.
The company’s products are primarily sold through retail stores, outlet stores and online. The brands have a strong presence in select department stores and specialty retailer locations.
Tapestry shareholders are paid a very pleasant 4.10% dividend. Goldman Sachs has set its price target at $49. That compares to the consensus target of $43.33 and to the most recent close at $32.93 per share. Here too, reaching the target would represent a 50% gain.
Shares of these five top companies across different sectors offer tremendous upside to the Goldman Sachs price objective. While there is no guarantee they get there, moving just halfway to the targets would be outsized gains for investors.
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