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Goldman Sachs says these 3 stocks could rise by more than 30% from current levels
After a real annus horribilus, we are all ready for better times. The American action strategy team at Goldman Sachs, led by David Kostin, sees those better periods in the future and in the short term. The team predicts a 25% gain for the S&P 500 in the next 24 months – or, to put it in absolute numbers, estimates that the index will reach 4,600 by December 2022. Kostin sets out four clear reasons to believe we are at the beginning of another extended bullfights. First, he notes that economic conditions have generally improved; second, it highlights the increase in corporate earnings; third, interest rates are historically low, as the Fed adheres to its near-zero rate policy; and finally, there is TINA or “there is no alternative”. The shares enter a virtuous circle, Kostin believes, as it offers the highest returns available at the moment. In a recent interview, Goldman’s chief stock strategist said of these points: “This is the story, it’s about an economy getting better, a pandemic, and it’s generally improving, and the Fed is waiting. All this is positive and I believe that the market recognizes this and will continue to do so. Goldman Sachs analysts are following Kostin’s example and point to three shares they believe will benefit from overall market growth. I sent the trio through the TipRanks database to see what other Wall Street analysts have to say about them. Lordstown Motors (RIDE) Goldman’s first choice is Lordstown Motors. This Ohio-based company, closely tied to the Big 3 General Motors standard, is a manufacturer of electric vehicles. The company works from GM’s former Lordstown, Ohio assembly plant, which it bought last year. Lordstown has over 6.2 million square meters of production area and a capacity of 600,000 vehicles per year. The company’s flagship vehicle is the Endurance all-wheel drive truck. The vehicle is based on a unique design, using individual electric motors on each wheel hub. Endurance is scheduled to be delivered in the fall of 2021. Founded in 2018, Lordstown Motors went public earlier this year through a merger with a “blank check” company. These transactions are designed to provide capital to companies wishing to enter the public market. As part of preparations for the launch of the Endurance truck, Lordstown has entered into an agreement with Camping World Holdings (CWH), the RV manufacturer. Camping World will train its mechanics with the new truck and provide garage space for Lordstown customers. The agreement includes expansion potential, such as sales sharing, space and the provision of electric drive systems for rolling stock. Covering this stock for Goldman Sachs, analyst Mark Delaney writes: “We believe this collaboration is a first step in addressing the Lordstown service footprint and loading infrastructure, and we see Lordstown’s decision to benefit from an existing service footprint as a cost-effective strategy. We believe that the broader customer experience, including services and pricing, plays a significant role in product differentiation and can help EV start-ups succeed. In our opinion, the ease and reliability of maintenance and loading are particularly important for the Lordstown fleet / commercial customer base, which focuses on the running time of the vehicle. “According to these comments, Delaney evaluates RIDE at a price of 31 USD. target for the next 12 months. At current levels, this implies a growth potential of 67%. (To follow Delaney’s track record, click here) Overall, RIDE shares gain a hold on analyst consensus, reflecting caution on Wall Street over a new highly speculative effort. Rating is derived from 4 recent reviews, split equally between 2 Purchases and 2 Sales. However, the average price target of $ 27.50 suggests that RIDE has a 48% increase for next year. (See RIDE Stock Analysis on TipRanks) Liberty Global (LBTYA) Next is Liberty Global, a telecommunications holding company. Liberty has a global presence, with operations in seven European countries: the United Kingdom, the Netherlands, Ireland, Belgium, Poland, Slovakia and Switzerland. The company boasts annual revenues of over $ 11 billion. Through its subsidiaries, Liberty serves over 11 million customers, with a combined number of 25 million subscriptions to broadband internet services, TV and telephony. The company also claims 6 million mobile and wifi subscribers. Liberty is a leading investor in European digital and online infrastructure projects. Among the company’s recent moves was the acquisition of Swiss telecommunications provider Sunrise Communications last month. With the completion of the transactions, Liberty Global now owns over 98% of the total share capital of Sunrise, making it the Swiss company of a wholly owned subsidiary of Liberty Global Group. Goldman Sachs analyst Andrew Lee, in an extensive review of Liberty’s business and market position, points to the Swiss acquisition as a key factor in the company’s future. He writes: “We consider Sunrise to be a quality asset with a strong potential to increase market share. We expect this to benefit directly from LBTYA, as Sunrise continues to gain shares in Swisscom, but also to contribute to the stabilization of UPC’s assets. “Lee gives LBTYA shares a buy rating, along with a target price of $ 33. This figure represents an increase of about 36% in one year compared to current levels. (To follow Lee’s track record, click here) Like the RIDE above, Liberty has a uniform split between its recent reviews – in this case, 3 Purchases and 2 Holdings, which makes the analyst’s consensus see a Buy moderate. The shares are priced at $ 24.32, and the average target price of $ 30.12 indicates room for a ~ 24% increase from this level. (See LBTYA stock analysis on TipRanks) Lufax Holding (LU) Fintech is a fast-growing niche, and Lufax operates a personal financial services platform serving the Chinese market. The company provides wealth management for China’s fast-growing middle class, a population that is not only growing in size but also in wealth. Lufax offers this population financing solutions for personal and business loans, which are not always well served by the established banking sector in China. The company’s customer base includes small business owners and employees. Revenues for the third quarter, reported earlier this month, reached $ 2 billion in US currency. EPS of 24 cents exceeded estimates by 10 cents, or 71%. However, these figures have fallen year on year. The main uncertainty Lufax is currently facing is state regulation. The Chinese government, while allowing a market-based economy, retains tight control over economic activity in general, and modern, state-of-the-art companies such as Lufax can cope with regulators who are sometimes uncomfortable with the digital world. The prospect of tighter regulation, while government officials are trying to impose controls on fintech technologies, worries some investors. After an extensive analysis of China’s technology regulatory environment, Goldman’s Elsie Cheng, who covers Lufax, noted: “We remain constructive in our ability to navigate Lufax’s ever-evolving regulatory environment and provide consistent added value.” consumers / its financial partners. “In light of this, Cheng is evaluating LU of Buy along with a $ 20 price target, which represents a 34% increase for next year. (To follow Cheng’s track record, click here) Overall, the Moderate Buy analyst consensus assessment for Lufax is based on 7 reviews, including 4 Purchases and 3 Holdings. The average target price of $ 17.70 indicates a potential increase of 15% next year. (See analysis of LU shares on TipRanks) To find good ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all the information about TipRanks shares. Disclaimer: The views expressed in this article are those of the analysts presented only. The content is intended for informational purposes only. It is very important to do your own analysis before making any investment.