There are a host of buying opportunities ahead of third quarter corporate earnings, according to Goldman Sachs. The investment bank said companies like Disney have plenty more room to run. Other buy-rated stocks at Goldman Sachs and screened by CNBC Pro include UPS, Omnicom, Nu Holdings and Baker Hughes. Disney Analyst Michael Ng is sticking with the entertainment and theme park giant. Goldman is bullish on everything from theme parks to sports, and businesses in between, ahead of Disney’s earnings later this quarter. “We continue to view Disney as a multi-year earnings compounder and believe the company is in the early stages of a broader product and Experiences investment cycle,” the analyst wrote. Ng trimmed his price target to $140 per share from $144, but said Disney is too compelling to ignore at current levels. “Against this backdrop, we maintain our constructive stance on the stock, underpinned by an estimated 13% EPS,” compound annual growth rate, he said. The stock is down 10% this year. Baker Hughes Goldman reinstated coverage of the oilfield services provider with a buy rating earlier this week. Analyst Neil Mehta said Baker Hughes is firing on all cylinders after closing on the acquisition of Chart Industries. Mehta likes the “operational and geographic synergies” from the completed merger, saying they’ll lead to margin and revenue growth. Goldman said that the stock remains compelling, even after a 23% runup this year. The bank sees “multiple paths for earnings expansion through 2030,” Mehta added. Baker Hughes is due to report earnings in late October. Goldman was one of the advisors to Baker Hughes and helped provide debt financing for the Chart Industries deal. Nu Holdings The LatAm fintech company has plenty of upside, Goldman wrote recently. Analyst Tito Labarta said he’s particularly bullish on the company’s foray into U.S. consumer credit lending. “We think NU’s ultra-low cost digital approach with a strong consumer experience could allow it to successfully enter the market,” he wrote. In addition, Goldman said Nu has proven especially adept at expanding its business while keeping costs down. “Competitive market, but with significant upside potential,” Labarta said. Nu Holdings is scheduled to report earnings in mid-November. Read more about what Goldman sees ahead for Nu here . UPS “With the completion of the AMZN volume drawdown and its respective cost take-out, UPS should begin to see a more consistent profit growth inflection. We believe the market is not yet contemplating that ex the AMZN transition drag, UPS should see a structurally leaner, highly automated & higher-yielding Domestic network – & remains one of only three fully integrated time definite parcel carriers that can operate on a global network scale.” Omnicom “We think consensus is too cautious on organic [growth]. Omnicom will report their Q3 results on 20th October … We think the growth will be driven principally by continued double-digit growth in media, which should continue to benefit from strong end market growth … With shares trading at 6x 2027e EPS, we think Q3 results could be a positive catalyst.” Disney “We continue to view Disney as a multi-year earnings compounder and believe the company is in the early stages of a broader product and Experiences investment cycle … Against this backdrop, we maintain our constructive stance on the stock, underpinned by an estimated 13% EPS CAGR.” Nu Holdings “Competitive market, but with significant upside potential … We think NU’s ultra-low cost digital approach with a strong consumer experience could allow it to successfully enter the market … We reiterate our Buy rating and $23 price target, while factoring in some of the initial costs of U.S. expansion but none of the potential upside. Baker Hughes “See Multiple Paths for Earnings Expansion Through 2030 … We highlight growth opportunities from operational & geographic synergies with the addition of Chart Industries … While the stock has lagged versus large cap peers over the past year amid investor cautiousness around the Chart acquisition, we believe with the deal now closed & integration underway, the stock offers an attractive entry point with risk/reward skewed to the upside.
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Sunday, October 4
