In today’s constantly fluctuating market, identifying stocks that possess the potential for substantial growth despite a general bearish sentiment can be vital for savvy investors. Recently, analysts from Goldman Sachs highlighted several stocks that stand apart from the crowd, showcasing the significance of conducting thorough research and maintaining a contrarian perspective. These recommendations are grounded in Goldman’s analysis that these equities are not only undervalued according to the broader market but also possess promising earnings potential that could lead to significant returns.
Goldman Sachs has gravitated towards a selection of stocks that are currently viewed unfavorably by the majority of Wall Street analysts. The firm’s analysts believe that these stocks are mispriced and could yield positive outcomes for investors willing to counter the prevailing market narratives. For each of these candidates, Goldman’s projections for earnings per share (EPS) in 2025 are estimated to be at least 2% higher than the consensus among analysts. This creates an appealing opportunity for those willing to take calculated risks in a landscape that often sways public opinion more significantly than underlying fundamentals.
One striking example from Goldman’s list is Tripadvisor, an online travel agency that has been grappling with shrinking analyst support, reflected in buy ratings from only 20% of market analysts. The company has faced a dismal year thus far, with its stock plummeting by nearly 32%. The cautious outlook was further solidified by Cantor Fitzgerald’s recent decision to begin coverage with an underweight rating, primarily due to challenging dynamics in the hotel sector. Following a disappointing earnings report that dampened hopes for a potential sale, the stock witnessed substantial losses. Nevertheless, Goldman’s bullish stance suggests that the stock may represent a potential turning point for investors willing to bet against prevailing negativity.
Another stock that has garnered Goldman Sachs’ favor is Shake Shack. The analysts anticipate that the fast-casual brand will outperform competitors, projecting their earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2025 to exceed industry expectations by 5%. Analyst Christine Cho has provided a strong buy recommendation, citing the company’s robust growth potential, particularly in an expanding market segment. It appears that Shake Shack has positioned itself in a landscape conducive to growth, with offerings that are particularly attractive to a diverse income demographic. Importantly, despite the current economic strains affecting consumers, the brand has managed to boost its stock price by an impressive 48% year to date, suggesting that the market may still possess an appetite for this unique brand of fast food.
Conagra Brands has emerged as another noteworthy name in Goldman’s selection. The food manufacturer has made its way onto Goldman’s upgraded “conviction list” due to its alignment with modern consumption tendencies, particularly within frozen food and snack categories. While the stock did see a dip of nearly 9.1% after underperforming against analysts’ earnings expectations, it has maintained a degree of resilience throughout the year, managing a modest gain of about 3%. The company reaffirmed its fiscal 2025 guidance despite recent setbacks, displaying a level of confidence that could entice investors seeking stability amid market turbulence.
In an environment where fear and uncertainty often dictate investment decisions, Goldman Sachs’ advocacy for these undervalued stocks underscores the importance of critical analysis and a contrarian outlook. By focusing on stocks that are currently receiving unfavorable ratings despite their underlying strengths, investors may unearth valuable opportunities for growth. It’s essential for individuals to conduct their own due diligence and evaluate the fundamentals of each stock while considering the market dynamics at play. Those willing to venture where others fear to tread could very well find themselves ahead of the curve as these undervalued stocks rise to reflect their true potential over time.