In a market characterized by uncertainty and widely divergent opinions among analysts, Goldman Sachs identifies a select group of stocks that could defy negative trends and offer significant upside. While many on Wall Street view these companies as neutral or even bearish, Goldman Sachs’ analysts see potential where others do not. This discrepancy suggests that with the right contrarian investment strategy, investors could find fertile ground for growth, particularly as 2025 approaches.
Goldman’s analysis reveals that these stocks not only have robust earnings projections that exceed consensus estimates by at least 2%, but they also possess price targets that offer at least a 10% upside from their current values. This nuanced approach highlights a possible undervaluation and creates appealing opportunities for investors looking to venture against the prevailing market sentiment.
Among the stocks on Goldman’s radar is Tripadvisor, an online travel giant facing significant headwinds. Current evaluations indicate that merely 20% of Wall Street analysts recommend a buy on this stock, a stark contrast to its substantial decline of nearly 32% year-to-date. The negative sentiment has surged following bearish assessments from firms like Cantor Fitzgerald, which recently initiated coverage with an underweight rating.
Despite these challenges, Tripadvisor is actively adapting by implementing new experiences and enhancing its product offerings. The pivotal moment occurred earlier this year when the company quashed speculation regarding a potential sale, leading to a remarkable 29% plummet in stock value. This incident emphasizes a critical juncture where sound long-term strategies may begin to overshadow short-term volatility, presenting a potential buying opportunity for investors willing to adopt a contrarian viewpoint.
On a brighter note, Shake Shack emerges as another stock favored by Goldman Sachs. The analyst team has predicted that the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2025 will be 5% above the average expectations of Wall Street. With an impressive stock price uptick of 48% this year, Shake Shack has successfully captured investor attention.
Goldman’s positive stance stems from the brand’s expansive total addressable market and growth prospects. Analyst Christine Cho emphasizes that Shake Shack’s innovative concepts cater to a demographic less vulnerable to economic downturns, potentially increasing customer frequency and attracting new visitors. For investors seeking growth in the food and dining sector, Shake Shack embodies a compelling opportunity that is still underappreciated by the broader market.
Conagra Brands represents yet another example of a stock with attractive potential as identified by Goldman. With a diversified portfolio in frozen food and snacks, Conagra aligns well with current consumer trends. However, the company faced challenges recently, experiencing a 9.1% drop in shares after releasing quarterly earnings that significantly missed market expectations.
Despite these hurdles, Goldman Sachs remains optimistic about Conagra’s trajectory, reinstating its position on the firm’s “conviction list.” The company’s commitment to its fiscal 2025 guidance indicates resilience, and there is speculation that its offerings will align well with evolving consumer needs in the future. This combination of a strategic focus and potential recovery paths makes Conagra a noteworthy play for those willing to take a contrarian approach to investing.
The Goldman Sachs outlook for these specific stocks highlights a distinct set of opportunities for investors. While the overall market sentiment leans towards caution, the analysis suggests that discerning investors can capitalize on these undervalued assets. Companies like Tripadvisor, Shake Shack, and Conagra Brands, despite their current struggles, illustrate the critical dynamic between market perceptions and intrinsic value. For those willing to navigate the short-term instability, these stocks might just offer the alpha investors are seeking as they prepare for 2025.