Goldman Sachs analysts have identified CAE as a potential undervalued gem in the stock market. Despite facing challenges in its civil aviation and defense divisions, the stock has been unfairly punished according to analyst Noah Poponak. The company’s undervaluation is primarily attributed to the struggling defense business, leading to a significant discount compared to its peers in the aerospace supply chain. However, Poponak believes that the valuation fails to appreciate the growth and margin profile of CAE’s civil segment. With shares down 17% this year, Goldman sees CAE as a significantly undervalued commercial aerospace asset with room for growth.
Analyst Kate McShane highlights BJ’s Wholesale Club as a company firing on all cylinders. The warehouse club has shown promising membership trends, increased traffic, and other advantages that contribute to its robust earnings potential. With strong traffic trends, volume growth in grocery categories, and enhanced customer engagement, BJ’s is on a positive trajectory. The recent earnings beat and reaffirmed guidance further show the company’s potential for growth. By opening new stores in new markets, BJ’s continues to gain market share and drive future growth opportunities. With shares up around 20% this year, McShane believes that BJ’s has more room to run in the market.
Workday is recognized by analyst Kash Rangan as a company with significant growth potential. The enterprise cloud management firm has been executing various growth initiatives that are yielding positive results. Rangan notes that Workday is well-positioned to become a $20 billion business by transitioning financial operations to the cloud. The company has shown strong customer retention rates, even during the pandemic, and continues to attract new business opportunities. With shares up nearly 25% in the past three months, Workday remains attractively valued and poised for long-term growth.
CrowdStrike: Regaining Momentum in the Cybersecurity Sector
Goldman Sachs foresees CrowdStrike returning to strong revenue and EPS growth over the next 12-24 months. The company’s strategic playbook, transparency, and engagement efforts are expected to drive growth following a period of industry leadership. With a focus on regaining market footing, CrowdStrike’s recent earnings commentary indicates a positive momentum in the cybersecurity sector. The company’s commitment to transparency and engagement positions it well for future success in the market.
Ducommun is highlighted for its strong growth outlook, particularly in the aerospace industry. The company stands to benefit from increased production in the aerospace original equipment market to meet growing demand. Ducommun is also expanding its presence in the aerospace aftermarket, where strong fundamentals support future growth. While facing pressures in its defense business, recent orders and improved comparisons are expected to accelerate growth in this segment. As Ducommun navigates through challenges, it remains positioned for growth and success in the aerospace sector.
Goldman Sachs has identified a range of undervalued stocks with significant growth potential in various sectors. From aerospace to retail and cybersecurity, these companies offer investors opportunities for long-term growth and value appreciation. By recognizing the strengths and growth initiatives of these undervalued stocks, investors can capitalize on the potential for substantial returns in the future.