Goldman Sachs analysts have named a slew of stocks that could see upside as April rolls in. The firm said these companies are well positioned as the second quarter gets underway. CNBC Pro combed through Goldman Sachs’ research to find the firm’s favorite stocks as of late. The names listed below are all buy rated. They include United Parcel Service, Nasdaq, Arcos Dorados , Global Payments and Arista Networks. Arcos Dorados The operator of McDonald’s in Latin America is down more than 12% in 2024, but the dip is worth buying, according to Goldman Sachs. “We view Arcos ongoing sell-off as unmerited, and think it creates a unique buying opportunity for investors willing to add exposure to one of the fastest-growing retailers in Brazil,” analyst Thiago Bortoluci said. Same-store sales are robust, and Arcos remains a share gainer in many parts of Brazil where competition is meager, he said. In addition, store openings continue apace, he added. While the company’s franchise agreement expires in 2027, the firm said an extension could lead to a re-rating. Even the stock is down to start the year, it’s too compelling to ignore, Bortoluci said. “With [return on invested capital] close to all-time highs, accelerating store openings, above-inflation SSS, and a relatively easy competitive background, we see 2024 as a year for consistent growth, enhanced leadership position and higher valuations,” he said. Nasdaq Several positive catalysts are brewing for the index and global markets company, according to analyst Alexander Blostein. The firm upgraded the stock to buy from neutral earlier this week, saying that it’s finally at an inflection point as growth picks up. Blostein said he sees Nasdaq’s “fin tech and Index revenues driving the firm’s valuation multiple higher over time.” Buybacks may also be in the company’s future, the firm said. “Given NDAQ’s ability to generate excess free cash flow following deleveraging and dividends, we believe this opens up a significant opportunity to execute buybacks starting in 2025,” Blostein said. Meanwhile, shares of the company are well positioned for gains. Nasdaq is up 8.5% this year. “NDAQ is set to benefit from the improving market backdrop,” the analyst said. UPS The shipping giant’s shares are primed for buying, Goldman said earlier this week. Analyst Jordan Alliger came away from the company’s recent investor meeting feeling confident that shares have plenty of room to run. “Management discussed various initiatives on market penetration and productivity with their impact on revenue and margin growth into 2026,” he said. Alliger acknowledged that the stock is a show-me story, but said investor fears over growth are largely overblown. “That said, we do recognize that growth had been challenged over the past couple of years, and UPS will likely have to prove re-acceleration is possible for the markets to give it credit,” he wrote. UPS shares are down more than 5% year to date. “We remain Buy rated on UPS as we do believe volumes will ultimately recover, costs will moderate, which when combined with productivity savings should indeed lift margin,” the analyst added. Arista Networks “We gain confidence in our above consensus ANET revised EPS estimates. … As the leading branded provider of switches to US hyperscalers, ANET is well positioned to capitalize on the ongoing growth in data, the continued digital transformation driving workloads from on-premise to public and hybrid-cloud, and the growing demand for higher bandwidth, faster speed, and lower latency.” Read more about this call here. UPS “That said, we do recognize that growth had been challenged over the past couple of years, and UPS will likely have to prove re-acceleration is possible for the markets to give it credit. … Management discussed various initiatives on market penetration and productivity with their impact on revenue and margin growth into 2026. … We remain Buy rated on UPS as we do believe volumes will ultimately recover, costs will moderate, which when combined with productivity savings should indeed lift margin.” Nasdaq “Following several years of challenged EPS growth we see NDAQ’s earnings trajectory accelerating to ~12% in 2025 and 2026 with a shifting mix toward higher-valued Fin Tech and Index revenues driving the firm’s valuation multiple higher over time. … Given NDAQ’s ability to generate excess free cash flow following deleveraging and dividends, we believe this opens up a significant opportunity to execute buybacks starting in 2025. … NDAQ is set to benefit from the improving market backdrop.” Arcos Dorados “We view Arcos ongoing sell-off as unmerited, and think it creates a unique buying opportunity for investors willing to add exposure to one of the fastest-growing retailers in Brazil. With ROICs close to all-time highs, accelerating store openings, above-inflation SSS, and a relatively easy competitive background, we see 2024 as a year for consistent growth, enhanced leadership position and higher valuations.” Global Payments “We hosted an investor meeting at GPN’s headquarters in Atlanta with CEO Cameron Bready and CFO Josh Whipple … Given the number of initiatives at play, we are impressed with the company’s ability to maintain its mid teens earnings growth algorithm at the same time, and we view this as helpful context in understanding the lower margin expansion in 2024.”
Buy these five stocks with upside potential as April kicks off, Goldman Sachs says
Mar 31, 2024
