Needless to say, 2021 has been a banner year for equities, with the S&P 500 up a stunning 25%. While the going was pretty easy by historical standards, with only one 5% drop year to date, there is a good chance that 2022 could bring some tougher sledding. The tapering of the quantitative easing program, which was designed to keep interest rates low, starts this month, and some feel that the Federal Reserve may be forced to raise interest rates earlier than expected, due to the surge in inflation.
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Given the potential for a more difficult 2022, the analysts at Goldman Sachs are focusing on companies they favor that have accelerating sales growth. A recent research report noted this:
Companies that are able to sustain accelerating sales growth will likely be much harder to find in 2022 amidst tougher year-over-year comparisons and expectations of relatively slower economic growth, particularly in the second half of 2022. Our analysts’ bottom-up forecasts suggest just over 25% of companies in our coverage will see a year-over-year acceleration in sales growth in 2022 as compared to 78% in 2021. Against this backdrop, we look for companies which on our analysts’ estimates will post higher annual revenue growth in 2022 versus 2021 with year-over-year growth rates improving through the first and second half of 2022.
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The Goldman Sachs team cited 17 Buy-rated stocks of companies with attractive and accelerating sales growth in 2022 as solid ideas for next year. We screened the list looking for the stocks that had the highest sales growth percentage for next year and found five great ideas for growth stock investors. While all are rated Buy it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision. The stocks are listed in order of the highest sales growth estimates for 2022.
Las Vegas Sands
With casinos open and thriving again, this is a great long-term play for growth investors. Las Vegas Sands Corp. (NYSE: LVS | LVS Price Prediction) develops, owns and operates integrated resorts in Asia and the United States.
The company owns and operates the Venetian Macao Resort Hotel, the Sands Cotai Central, the Parisian Macao, the Plaza Macao and Four Seasons Hotel Macao, Cotai Strip, and the Sands Macao in Macao, the People’s Republic of China, as well as Marina Bay Sands in Singapore.
It also owns and operates the Venetian Resort Hotel Casino on the Las Vegas Strip and the Sands Expo and Convention Center in Las Vegas. Its integrated resorts feature accommodations, gaming, entertainment and retail malls, convention and exhibition facilities, celebrity chef restaurants and other amenities.
The company has eliminated its dividend and said that it has ended its plans to open an integrated resort casino in Japan.
Goldman Sachs estimates 91% earnings growth for the company in 2022. The firm has a $68 price target on Las Vegas Sands stock, which is well above the $49.86 consensus target. The share price popped almost 7% on Monday to close at $40.63.
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Boeing
This stock has sold off recently and is providing a very solid entry point. Boeing Co. (NYSE: BA) is the world’s leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined.
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The company’s different segments are Commercial Airplanes; Boeing Defense, Space & Security; and Boeing Capital. The latter provides financial solutions facilitating sale and delivery of Boeing commercial and military aircraft, satellites and launch vehicles.
Boeing and Embraer have signed a non-binding memorandum of understanding to create a new strategic partnership for commercial aviation. The new joint venture is valued at $4.75 billion, which values Boeing’s 80% share at $3.8 billion.
The analysts project 57% sales growth in 2022. The Goldman Sachs price objective is $305, a price not seen since before the pandemic sell-off. Boeing stock closed on Monday at $209.90 a share.
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Array Technologies
This company sometimes is confused with a biotech with a similar name that Pfizer bought in 2019. Array Technologies Inc. (NASDAQ: ARRY) provides solar tracking solutions and services for utility-scale projects. Its products include DuraTrack HZ v3, a single-axis solar tracking system, and SmarTrack, a machine learning software that automatically adjusts module angles in response to weather and site conditions.
This stock had a red-hot initial public offering last year. Shares charged out of the gate, as the first trade was 34% above where the upsized IPO was priced. A total of 47.5 million shares were sold in the offering, as the maker of ground-mounting systems used in solar energy projects sold 7 million shares to raise $154 million and a selling shareholder sold 40.5 million shares.
Since then the stock has been a disaster but has bounced off the lows that were posted back in the summer. Goldman Sachs estimates 52% sales growth in 2022 and has a $27 price target. The consensus target for Array Technologies stock is $25.73, and shares ended Monday at $24.22.
Take-Two Interactive
This top gaming software company continues to be among the best in its industry. Take-Two Interactive Software Inc. (NASDAQ: TTWO) develops, publishes and markets interactive entertainment solutions for consumers worldwide. The company offers its products under the Rockstar Games and 2K labels, as well as under Private Division and Social Point labels.
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Take-Two develops and publishes action/adventure products under the Grand Theft Auto, Max Payne, Midnight Club, and Red Dead Redemption names through developing sequels, and it offers downloadable episodes, content and virtual currency, as well as releasing titles for smartphones and tablets. The company also develops brands in other genres, including the LA Noire, Bully and Manhunt franchises.
The company also publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports and family/casual entertainment under the BioShock, Mafia, Sid Meier’s Civilization, XCOM series and Borderlands labels. It publishes sports simulation titles, comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; and the Golf Club. Additionally, the company offers free-to-play mobile games, such as Dragon City and Monster Legends.
The analysts estimate the company will grow sales by 39% in the coming year. The $233 Goldman Sachs price target is higher than the $214.56 consensus target for Take-Two Interactive Software stock. Monday’s closing print of $164.91 was down almost 4% for the day.
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Spirit AeroSystems
This is another top aerospace and defense company that offers solid upside potential. Spirit AeroSystems Holdings Inc. (NYSE: SPR) is one of the world’s largest non-OEM designers and manufacturers of aerostructures for commercial aircraft. Its core products include fuselages, pylons, nacelles and wing components.
Spirit also provides aftermarket customer support services, including spare parts, maintenance/repair/overhaul, and fleet support services in North America, Europe and Asia. Spirit Europe produces wing components for a host of customers, including Airbus.
Many across Wall Street feel that the cost challenges that the company has experienced on 737-MAX over the past few years are well in the rearview mirror, and most see a continued strong free-cash-flow outlook and stock buybacks.
Goldman Sachs projects 37% earnings growth, and the analysts have set a $63 price target. The consensus target is just $55.40. Spirit AeroSystems stock closed at $41.59 on Monday.
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These five top companies have very strong positions in their respective sectors and are expected to post outstanding sales growth in 2022. The value proposition for investors is that their stocks offer some of the best entry points in some time, which could bode very well for those buying the shares now.
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