The S&P 500 has soared 6% over the past week amid speculation the Federal Reserve has completed its 16-month campaign of interest-rate hikes.
It’s difficult to determine whether the rebound signals a sustained rally for stocks or whether the July 31-Oct. 27 decline will resume.
If you are thinking of buying stocks soon, you may want to consider names on Goldman Sachs’ 25-stock “Conviction List.”
The bank puts out the list monthly and has two new entrants for November, listed below. One stock exited the list: hospital owner HCA Healthcare HCA.
Boeing
Boeing BA: Goldman has a $258 one-year price target for the giant jet maker, compared to Friday’s price quote of $194.70.
The stock has slid 25% from its June air-show highs and now trades below 10 times mid-cycle free cash flow, notes the Goldman report that includes the monthly list.
That indicates investors are more focused on near-term disruptions than long-term fundamentals and normalized free cash flow, according to Goldman analyst Noah Poponak.
“That creates a buying opportunity in this domestic half of the global aircraft manufacturing duopoly (Airbus is the Europe-based competitor),” the report says.
Poponak’s bullishness stems from belief that “demand for planes is greater than supply, production challenges are dissipating and defense margins should improve,” the report says.
Simon Property Group
Simon Property Group SPGS: Goldman has a $144 one-year price target for the dominant shopping-mall Real Estate Investment Trust, compared to Friday’s price quote of $118.85.
Goldman analyst Caitlin Burrows believes that Simon is “favorably positioned in a post-pandemic retail environment where its customers — retailers — are looking to expand store footprints,” the report said.
That expansion drive stems from the fact that “consumers who are seeking experience-based consumption options (in the case of SPG, just going to the mall to shop),” the report says.
“The company also has an opportunity to expand by upgrading existing properties, adding new end uses, and building out internationally.” In addition, it has a “relatively clean balance sheet and a deep valuation discount versus its peers and its history,” the report said.
The Remaining 23
The other stocks on Goldman’s list are:
Amazon AMZN
American International Group AIG
Apple AAPL
Bath & Body Works BBWI
Blue Owl Capital OWL
Chevron CVX
Cintas CTAS
First Solar FSLR
JB Hunt Transport Services JBHT
Jefferies Financial JEF
JPMorgan Chase JPM
Merck MRK
Nvidia NVDA
Okta OKTA
PPG Industries PPG
Quanterix QTRX
Republic Services RSG
Shift4 Payments FOUR
Southern Company SO
TE Connectivity TEL
Vertex Pharmaceuticals VRTX
Warner Bros Discovery WBD
WW International WW
The author of this story owns shares of Amazon, Apple, Cintas, JPMorgan Chase and Vertex.
