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Goldman Sachs Raises Price Targets on 3 Red-Hot Stocks to Buy
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With the year-end holidays almost here, and just three short weeks left in 2020, many investors are looking to next year and starting to reset portfolios. Many investors remain very nervous, especially given the massive fourth-quarter rally off the September market lows and the markets printing all-time highs seemingly daily. The overall take is one of slow but steady going forward, given the incredible run in the equity markets and the potential for a slowing economy due to the COVID-19 flare-ups.
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In a series of new reports, Goldman Sachs raises the price targets on stocks of some companies that delivered the goods in a big way during earnings season. Given the increases in price targets, they still look to have some very solid upside potential. Here we spotlight three stocks rated Buy in which the analysts have significantly boosted the price targets.
However, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Coupa Software
This is a recognized leader in what is called sourcing applications. Coupa Software Inc. (NASDAQ: COUP) provides a unified, cloud-based spend management platform that connects organizations with suppliers globally. The company offers spend management cloud applications that are pre-integrated. The platform offers consumerized financial applications.
The Coupa Software platform offers consumerized financial applications. Its spend management suite includes procurement, invoicing, expenses, sourcing, inventory, contract lifecycle management, budgeting, analytics, open business network, supplier information management and storefront.
The platform offers features such as procure-to-pay solution; online invoice management, and inventory management and tracking software system. Its solutions for business needs include financial compliance and mobile productivity. The company’s solutions for enterprise resource planning include Oracle and NetSuite. Coupa offers solutions for industries, including financial, health care, oil and gas, retail, technology, and food and beverage.
24/7 Wall St.Goldman Sachs is very positive on Coupa shares:
We were impressed to see billings growth for Coupa accelerate sharply to 33% in the fiscal third quarter, up from 21% in the fiscal second quarter, as the business recovered well from a relatively brief period of disruption. We believe the trajectory of growth should continue to improve through the fiscal fourth quarter and next year, as we believe customers are increasingly shifting spending priorities into workflow automation tools with quick time to value.
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The $328 Goldman Sachs price target was raised to a stunning $413. The Wall Street consensus target is down at $284.04. Coupa Software stock closed trading on Tuesday at $314.49 a share.
Freeport-McMoRan
This remains a compelling value at current trading levels, and copper pricing has been on fire. Freeport-McMoRan Inc. (NYSE: FCX) is the world’s largest publicly traded copper and molybdenum producer, and the eighth largest gold producer. Its key operating and development assets are in Indonesia, North and South America, and Africa.
Highly leveraged toward copper mining, the company could be a big player in a scenario of rebuilding and repairing old and battered projects and would clearly benefit from stronger demand and higher prices for industrial commodities.
The Goldman Sachs team has been bullish on the stock (which is on the firm’s prestigious Conviction List) and the sector for some time. The research report said this:
On November 13, PT Freeport Indonesia (PT-FI) and Mitsubishi Materials Corp. signed a memorandum of understanding to expand the Gresik copper smelter and refinery. The expansion is projected to increase capacity by 300,000 tons per year, bringing total capacity to 1.3 Million tons per year. Construction is expected to be completed in 2023, with financing of $250 million provided by PT-FI.
The Goldman Sachs price objective jumped to $35 from $23, well above the $22.36 consensus target. Tuesday closing print for Freeport-McMoRan stock was $24.47.
Stitch Fix
This company had a hot 2017 initial public offering and the shares still have big-time potential upside for investors. Stitch Fix Inc. (NASDAQ: SFIX) is an online personal styling service that delivers personalized fixes of apparel and accessories for men, women and kids.
Stitch Fix is a first-of-its-kind, leading data-driven apparel disruptor. Across Wall Street, many feel that the secular trend of consumer purchasing habits moving online from offline will only continue. The company’s data-driven and differentiated business model creates powerful network effects and a defensible moat on both the front-end (customer acquisition) and back-end (logistics). In addition, the private label strategy, which should continue to help enhance customer satisfaction and customer loyalty, as well as prove accretive to operating margins over time.
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The company reported very solid results, and the analyst said this:
Stitch Fix reported fiscal first quarter 2021 net revenue of $490 million (versus consensus of $481 million) and Adj. EBITDA of $6.9 million versus the consensus of $1.6 million, driven by a quarter over quarter increase of 240,000 active clients and record success rates. As apparel recovers, we continue to believe the share shift to ecommerce will become more apparent, driving a catch-up in company performance, particularly as operations normalize, incremental revenue streams like Direct Buy outgrow the core, and retail store closures across the apparel category further force consumers online.
Goldman Sachs raised its $34 price target to $58. The consensus figure is $34.22, and Stitch Fix stock was last seen trading at $49.89, after a stunning 39% gain following the outstanding earnings report.
24/7 Wall St.These three stocks have been absolutely on fire. While they remain great ideas for aggressive growth investors, it may make sense to just buy partial positions and see if there is not some year-end selling. Many on Wall Street feel that we may see larger than normal selling in front of 2021, as the Democrats likely will raise capital gains taxes if they indeed take control.
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