Goldman Sachs Sees as Much as 33% Upside in These Stocks

1. Weber

Leading off our list is grill maker Weber, which Goldman started coverage on with a Buy rating last week. Along with the bullish stance, Goldman analyst Kate McShane planted a US$22 price target on the shares, representing upside of about 33% from where they sit now.

With the trend of investing in homelife picking up pace, McShane thinks Weber is a “solid growth story.” The analyst also sees the company benefiting from consumer brand awareness and global growth tailwinds.

In 2020, the company posted revenue of US$1.5 billion with a 14% return on invested capital.

Weber shares spiked after their IPO earlier this month, but have fallen 17% since the initial run-up, providing a possible opportunity for contrarian traders.

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2. Workday

Cloud computing technologist Workday saw Goldman recently raise its price target from US$300 to US$330 per share. In other words, Goldman analyst Kash Rangan sees upside of about 20% from where Workday currently trades.

Rangan also reiterated his Buy rating on the stock. In a research note to investors, he wrote that Workday is well positioned to take market share over the long haul.

In its recent Q2 results, Workday blew out expectations with revenue growth of 19%. The company also posted non-GAAP earnings of US$1.23 a share, well above the average analyst single-share estimate of 78 cents U.S.

Workday shares are up just 13% so far in 2021, versus 21% for the S&P 500.

3. Snowflake

Rounding out our list is cloud-based data platform Snowflake, which Goldman’s Rangan lifted his price target on from US$300 to US$340. Rangan’s projection represents 14% worth of upside for today’s buyers of Snowflake shares.

Rangan thinks Snowflake’s native cloud platform is ideally positioned to replace data warehousing services long term due to its scalability and elasticity. Rangan also highlighted the company’s “best in class” net revenue retention rate of 169% in the most recent quarter.

While Snowflake posted a wider-than-expected loss in Q2, revenue more than doubled from the year-ago period to US$272 million.

Snowflake shares are up 6% year to date, underperforming the S&P 500 by a wide margin, suggesting the stock could have plenty of room to run for the rest of 2021.

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Go your own way?

There you have it: three newly upgraded stocks worth checking out.

Even if you don't agree with Goldman on these specific stock picks, your goal as an investor should always remain the same: seeking out attractive assets at discounted prices.

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