Goldman Sachs: Both of these “strong buy” stocks could rise by at least 30%
We are well into the first quarter of 2021 now, and it is a good time to consider what lies behind us, and how it will impact on the future. Jan Hatzius, Goldman Sachs strategist believes we are on an upward path, with better times ahead. Hatzius sees the developed economies expand as the corona crisis declines. For the U.S., in particular, the ‘massive fiscal support’ it means in the latest COVID relief package is pleasing. Even so, however, Hatzius believes Q4 was a weaker time, and we are not yet completely out of it. It puts Q1 growth at 5%, and says we will see further expansion ‘accumulated in the spring,’ and ‘accelerated to a 10% growth rate in Q2. And with acceleration, Hatzius means investors should expect a Q2 GDP in the community of 6.6%. Hatzius credits that prediction to the ongoing vaccination programs, and the continued development of COVID vaccines. The Moderna and Pfizer vaccines are already in production and circulation. Hatzius says of these programs, “With the fact that we are developing more options and that governments around the world will have more choices to choose between different vaccines [means] production is likely to go up sharply in the coming months … It is certainly a key factor in our optimistic growth forecast. “In addition to Hatzius’ eye on the macro position, analysts from Goldman Sachs have also been diving into specific stocks. Using the TipRanks database, we named two stocks which the company predicts will see tough growth in 2021. The rest of the Street will also support the two weavers, each using a “Strong Buy” consensus level. (STLA) We’ve talked before about the Detroit manufacturers, and rightly so – they are major players in the U.S. economic outlook.But the U.S. has not gained a monopoly on the automotive sector, as has been proven with Dutch-based Stellantis.This international conglomerate is the result of a merger between the French PSA Groupe and the Italian-American Fiat-Chrysler.The agreement was a 50-50 stock deal in total, and Stellantis boasts a market cap in excess of $ 50 billion, and a package n of near-legend nameplates, including Alpha Romeo, Dodge Ram, Jeep, and Maserati. The contract created by Stellantis, now the world’s fourth largest car manufacturer, took 16 months to fulfill, after it was first announced in October 2019. Now that it really is – they were united completed in January this year – the entity jointly promises cost savings of almost 5 billion euros in the work of both Fiat-Chrysler and PSA. Achieving these savings is being looked at through greater efficiency, not through plant closures and cuttings. Stellantis is new in the markets, and the STLA ticker has put FCAU Fiat-Chrysler on the New York stock exchange, giving the new company a stormy history. The company’s share value is almost three times its low, which reached March last year at the time of the corona decline, and has remained strong since the merger was completed. George Galliers, a Goldman Sachs analyst, is optimistic about the future of Stellantis, writing, “We see four drivers that we believe will enable Stellantis to deliver. 1) PSA and FCA product charts in Europe cover equal size volumes at equal price points… 2) Enlargement economies can have a significant impact on both companies … 3) Both companies are at the same level. much lower [in] electric vehicle programs. The integration prevents duplication and delivers collaboration. 4) Finally, we see some opportunities around central staff where existing activities can be consolidated … ”Based on this view, Galliers is rated STLA to Buy and its $ 22 price target shows room for 37% growth in the coming year. (To view Galliers ’history, click here) Overall, this merger has sparked a lot of excitement, and on Wall Street there is widespread agreement that the company will collectively generate results. STLA has a Strong Buy consensus rating, based on a 7-sided unanimous review. The stock is priced at $ 16.04, and the average target of $ 21.59 is acceptable to Galliers ’, suggesting an upside capacity of 34.5%. (See STLA stock analysis on TipRanks) NRG Energy (NRG) From cars, we move to the energy sector. NRG is a $ 10 billion utility provider, with dual headquarters in Texas and New Jersey. The company supplies electricity to more than 3 million customers in 10 states plus DC, and generates more than 23,000 MW of capacity, making it one of the largest power facilities in America North. NRG production includes coal, oil and nuclear power plants, as well as wind and solar farms. In their most recent quarterly report, for 3Q20, NRG showed $ 2.8 billion in total revenue, along with $ 1.02 EPS. While down year on year, this was still more than enough to sustain the company’s strong and reliable share payout f 32.5 cents per common share. This makes an annual up to $ 1.30 per common installment, and yields 3.1%. Analyst Michael Lapides, in his cover of this stock for Goldman Sachs, considers NRG a Buy. Its $ 57 price target suggests an upside of 36% from current levels. (To view Lapides’ history, click here) Noting the recent acquisition of Direct Energy, Lapides says it expects the company to kill itself in the near future. “Following the acquisition of Direct Energy, one of the leading retailers of electricity and natural gas in the US, NRG sees the NRG industry as a turning point. The integrated business model – in which wholesale buyer power generation that provides electricity used to serve customers is provided by NRG’s competitive retail arm – reduces exposure to buyer power markets. and commodity prices, while increasing the capacity of FCF, ”analyst Lapides wrote as a whole,“ We see 2021, from a capital distribution perspective, as a year of decentralization, but with NRG a creating nearly $ 2bn / year in FCF, we are seeing a rise in share purchases as well as 8% shareholding growth ahead in 2022-23. “We’ll be looking at other stocks here with a Strong Buy analyst consensus level.This one is based on a 3 to 1 split between Buy and Hold reviews.NRG is trading for $ 41.84 and its average price target of $ 52.75 suggests 26% upside down from that level onwards the timeframe a on-year. (See NRG stock analysis on TipRanks) To find great ideas for stock trading at attractive valuations, visit TipRanks Best Stocks to Buy, a recently launched tool that unifies all perspectives balancing TipRanks Di. sclaimer: The views expressed in this article are those of the emerging analysts. The content is intended for informational purposes only. It is very important to do your own analysis before making any investment.