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Goldman Sachs just released its best stock ideas list for June.
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The bank expects several names in the banking, energy, and tech space to be big winners.
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These 23 stocks are the top picks among Goldman Sachs analysts right now.
Investors looking for fresh stock ideas in a volatile market can draw some inspiration from Goldman Sachs’ US Conviction List.
Updated monthly, the list features 20 to 25 names curated by an investment committee led by Steven Kron, director of Americas Equity Research.
It’s not an easy task, especially when Goldman Sachs has roughly 1,200 US stocks in its coverage universe. The list includes a selection of the most differentiated buying opportunities in the US stock market, and the committee uses a bottom-up process to determine the top stock picks.
The stocks that make the director’s cut aren’t always the most popular ones, either — the list features many stocks with a less than 50% buy rating from Wall Street analysts.
June marked the two year anniversary of the list. Since its inception, the list’s hit rate, or percentage of stocks that have outperformed a stated benchmark, has been 47% and 52% relative to the cap-weighted and equal-weight S&P 500, respectively.
While the list is meant to provide investment ideas and shouldn’t be treated necessarily as a single portfolio, the cumulative performance of its constituents is quite strong. As a basket, the US Conviction List has returned 46% over its lifetime, outperforming the S&P 500 by 180 basis points and the equal-weighted S&P 500 by 1,560 basis points.
This month, four new names were added, including the banking giant Capital One Financial (COF), which recently acquired competitor Discover Financial Services. After the transaction, Capital One is now the largest credit card issuer in the US, and Goldman Sachs believes the deal will allow the bank to grow its earnings by 34% in the next two years.
Listed below are June’s top stock picks, as well as each company’s market cap, price target, and investment thesis.
Philip Morris International
Ticker: PM
Market cap: $281.1 billion
12-month price target: $190
Investment thesis: “Leading the cigarette industry to a smoke-free future”
Bank of America Corp
Ticker: BAC
Market cap: $332.4 billion
12-month price target: $46
Investment thesis: “A deregulation beneficiary levered to an expanding economy”
Capital One Financial Corp
Ticker: COF
Market cap: $121.0 billion
12-month price target: $242
Investment thesis: “Merger synergy story with network effects and a big buyback”
Houlihan Lokey Inc
Ticker: HLI
Market cap: $12.2 billion
12-month price target: $207
Investment thesis: “The right time for an acquisitive restructuring specialist”
Mid-America Apartment Comm
Ticker: MAA
Market cap: $18.3 billion
12-month price target: $192
Investment thesis: “Sunbelt migration beneficiary at a good time in the supply cycle”
Raymond James Financial Inc
Ticker: RJF
Market cap: $29.7 billion
12-month price target: $173
Investment thesis: “Strong earnings outlook with exposure to a Capital Markets recovery”
Alnylam Pharmaceuticals Inc
Ticker: ALNY
Market cap: $39.7 billion
12-month price target: $378
Investment thesis: “Catalyst-rich biotech company on the edge of an inflection”
Baxter International Inc
Ticker: BAX
Market cap: $15.7 billion
12-month price target: $39
Investment thesis: “Optimizing a profitable footprint”
Insmed Inc
Ticker: INSM
Market cap: $12.7 billion
12-month price target: $100
Investment thesis: “A product portfolio company emerging — at an inflection point”
Johnson & Johnson
Ticker: JNJ
Market cap: $373.4 billion
12-month price target: $176
Investment thesis: “Navigating a patent cliff to a higher stock price”
Air Lease Corp
Ticker: AL
Market cap: $6.4 billion
12-month price target: $69
Investment thesis: “A critical cog in a supply constrained airplane market”
Deere & Co
Ticker: DE
Market cap: $137.1 billion
12-month price target: $610
Investment thesis: “Close to as bad as it is likely to get; an inflection story”
GE Vernova Inc
Ticker: GEV
Market cap: $129.1 billion
12-month price target: $500
Investment thesis: “Dominant position to electrify America”
Woodward Inc
Ticker: WWD
Market cap: $12.9 billion
12-month price target: $229
Investment thesis: “The right products for the right planes in the right cycle at the right time”
Kodiak Gas Services Inc
Ticker: KGS
Market cap: $3.1 billion
12-month price target: $44
Investment thesis: “An underappreciated steady cash flow compounder with a dominant market position”
Universal Display Corp
Ticker: OLED
Market cap: $6.8 billion
12-month price target: $183
Investment thesis: “Product cycle on steroids as OLED rolls out the color blue”
Viper Energy Inc
Ticker: VNOM
Market cap: $11.5 billion
12-month price target: $56
Investment thesis: “Asset light, scaling Permian pure play”
Cloudflare Inc
Ticker: NET
Market cap: $57.5 billion
12-month price target: $172
Investment thesis: “Security software platform with the product pipeline to grow share of wallet”
Onestream Inc
Ticker: OS
Market cap: $6.7 billion
12-month price target: $33
Investment thesis: “Early-stage growth compounder modernizing the Office of the CFO”
Pinterest Inc
Ticker: PINS
Market cap: $21.0 billion
12-month price target: $42
Investment thesis: “Well-positioned profitable compounder in the digital advertising space”
Snowflake Inc
Ticker: SNOW
Market cap: $68.6 billion
12-month price target: $230
Investment thesis: “Next layer Gen-AI winner with a new CEO focused on accelerating product innovation”
AT&T
Ticker: T
Market cap: $200.0 billion
12-month price target: $31
Investment thesis: “Earnings upside from market discipline and broadband growth to drive valuation upside”
Uber Technologies Inc
Ticker: UBER
Market cap: $176.0 billion
12-month price target: $110
Investment thesis: “A disruptor not yet ready to be disrupted”
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