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Goldman Sachs is betting on these 3 stocks; Sees more than 50% upside potential
What goes up must come down, as we all know. This physical fact is the underlying worry in the stock market, which fuels our suspicion of bubbles. But investment firm Goldman Sachs doesn’t think we should be worried; The company’s chief global equities strategist Peter Oppenheimer gives several reasons to believe that the current uptrend in the market is real. Its key points include the equity risk premium, the real profits made by the big tech giants and the high savings rate of American households emerging from the COVID pandemic. Taking these points one by one, Oppenheimer notes that under the current regime of historically low interest rates, high risk stocks offer a premium; that is, their potential returns are much higher than those of safe bonds and justify the additional risk factor. On the second point, the giants of the technology industry represent a massive concentration of capital and wealth in only a few companies (Facebook, Apple, Amazon, Microsoft and Google); But these companies have built that focus on solid fundamentals and real earnings growth, rather than an inflation bubble. Finally, on the savings side, the decline in overall economic activity during the pandemic period has left US households with some $ 1.5 trillion in accumulated savings – which can be used to invest in retail stocks. . Taking Oppenheimer’s perspective and turning it into actionable recommendations, the pros at Goldman Sachs are pushing three stocks. Specifically, the company’s analysts see upside potential of more than 50% in-store for each. We researched these stock calls in the TipRanks database, to find out if Wall Street agrees with Goldman’s take. SpringWorks Therapeutics (SWTX) Goldman’s top pick that we’re looking at is a clinical-stage biotechnology company in the oncology niche. SpringWorks uses a precision medicine approach in the development and commercialization of medical treatments for patient populations with severe cancers and rare diseases. The company has an active pipeline, with drug candidate investigation programs for the treatment of desmoid tumors, plexiform neurofibromas, multiple myeloma and metastatic solid tumors. The first two programs are the most advanced. Nirogacestat, the drug used in desmoid tumor testing, is currently in a Phase 3 study and has received orphan drug designation and expedited designation from the FDA. The drug candidate works according to two therapeutic mechanisms and has shown promise against multiple myeloma. Clinical studies with nirogacestat are ongoing for several additional indications. The company’s most advanced drug candidate, mirdametinib, is currently in a phase 2b trial as a treatment for inoperable plexiform neurofibromas (NF1-PN). It is a rare cancer of the nervous system, affecting the peripheral nerve sheaths and causing severe pain and disfigurement. NF1-PN can affect children and adults, and mirdametinib is being investigated as a treatment for both populations. As with Nirogacestat, the FDA has assigned orphan drug and expedited treatment designations to this program. The trial is currently 70% enrolled and early data is described as “encouraging”. A large, active research program will always attract the attention of Wall Street biotech experts, and Goldman analyst Corinne Jenkins noted several upcoming catalysts for SprinWorks: “1) DeFi baseline in desmoid tumors (2H21), 2) mirdametinib + lifirafenib combination data (2021), 3) BGB-3245 first-in-human data (2021), 4) DREAMM-5 update in MM (2H21), and 5) intermediate clinical results details of ReNeu (2021). From there, the analyst sees the company showing strong potential for returns. “[We] view the business prospects of SWTX’s rare oncology programs motivated by extended treatment times on the rise, but view the expected clinical results this year as well understood and therefore unlikely to significantly boost stock performance. We frame the collection of upcoming catalysts in a scenario analysis below that supports our vision of an attractive risk / reward for action on the 2021 balance, ”Jenkins said. So it’s no surprise that Jenkins is a fan. Jenkins is pricing SWTX at Buy, and his one-year $ 112 price target implies a ~ 66% rise from current levels. Goldman Sachs isn’t the only company impressed with SpringWorks. The company’s stock has 4 buy notices, for a unanimous Strong Buy consensus rating. The shares are priced at $ 67.28 and their average price target of $ 110 suggests a potential upside of 63.5% for the coming months. (See SWTX stock market analysis on TipRanks) Targa Resources Corporation (TRGP) We’re going to shift gears now and take a look at one of the mid-size companies in the energy sector. Intermediaries are companies that transport hydrocarbons from wellheads to markets; splitting production and transportation allows companies to streamline their operations. Targa operates a network of intermediary assets in North America, primarily in Oklahoma-New Mexico-Texas-Louisiana. Assets include natural gas and crude oil pipelines, with operations divided into two segments: gathering and processing and logistics and transportation. Targa has seen its activity increase over the past year. TRGP achieved 4Q20 adjusted EBITDA of $ 438 million, slightly above the median estimate of $ 433 million for the street. Full-year adjusted EBITDA of $ 1.637 billion topped the guide by $ 1.5 billion to $ 1.625 billion. For the future, TRGP expects 2021 adj. EBITDA of $ 1.675 billion to $ 1.775 billion, up 5% year-on-year at midpoint, which compares favorably to Street’s median estimate of $ 1.698 billion / $ 1.684 billion. Targa’s shares have gone up. The stock has risen 375% in the past 12 months, and Goldman Sachs analyst John Mackay sees more benefit in the cards. Mackay gives TRGP a buy rating, along with a price target of $ 49, suggesting a 51% year-over-year increase. (To see Mackay’s track record, click here) “Our thesis for TRGP, in short, is that we see its strategic Permian and downstream LGN assets sustaining above-consensus EBITDA (GSe ~ 7% higher on average vs. to Eikon for 2022 +), which could allow higher returns on capital – and sooner than expected – all supported by a valuation that remains relatively cheap…. [As] year ahead, we expect the focus to be on the important catalyst for upcoming capital allocation which (we anticipate) is expected to occur in early 2022 once TRGP completes its planned DevCo consolidations. Mackay wrote. There is broad agreement on Wall Street that Targa is buying a proposition. Of the 15 recent reviews, 13 are to be purchased against only 2 takes. The average price target of $ 38.27 indicates upside potential of 18% from the current price of $ 32.45. (See TRGP market analysis on TipRanks) ADT, Inc. (ADT) For the last stock on Goldman’s list, we’ll be shifting gears again, this time to the home security industry. ADT offers a range of security services focused on alarm monitoring. Services include burglar and fire alarms, packages that include 24/7 surveillance, motion detectors, smoke and carbon monoxide detectors, and “smart home” modifications. ADT’s services are available in the residential and commercial markets. The company’s revenue stream has been stable over the past year, between $ 1.3 billion and $ 1.37 billion, and each quarter’s profit has been stable or slightly higher year-over-year. the other. Full-year revenue increased 4% from 2019. The company’s net profit loss moderated throughout the year, and the fourth quarter result was a loss. net 14 cents was the lowest of the year. Among the bulls is Goldman Sachs analyst George Tong who writes, “We believe ADT is well positioned to capitalize on new growth opportunities, including strong new home construction trends and growing demand. smart homes, as it offensively increases its subscriber acquisition costs by $ 150. 250mn this year. With these investments, management expects to accelerate the growth of gross monthly recurring income additions in mid-teens in 2021. We expect ADT to increase its penetration of the fast-growing smart home category over the longer term through to these additional expenses … target price on this stock to go with its buy note, which implies an increase of 58% for the next 12 months. (To see Tong’s track record, click here) Tong takes a bullish view of ADT, but there is a range of opinions on Wall Street. ADT has a moderate buy score, based on a 3-1-1 split between buy, hold and sell scores. The current share price is $ 8.21, and the average price target of $ 10.55 suggests an increase of about 28.5% from that level. (See ADT Stock Analysis on TipRanks) To find great ideas for stocks traded at attractive valuations, visit Top Stocks to Buy from TipRanks, a newly launched tool that brings together all the information about stocks from TipRanks. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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