Goldman Sachs has revamped its “Conviction List – Directors’ Cut,” a select group of buy-rated global stocks chosen for their strong performance potential and high risk-adjusted returns. The list for December saw the removal of companies like New Zealand software firm Xero, Asia-Pacific’s Lenovo, France’s industrial supplier Air Liquide, and advertiser JCDecaux. Meanwhile, several stocks with promising upside potential joined the list.
Among the new additions is Denmark’s Novonesis, a leader in biotechnology for industrial enzymes and biopharmaceuticals. The company stands out due to its market leadership and significant investment in research and development. Geared for strong growth in organic sales and earnings, Novonesis benefits from structural trends favoring sustainability and wellness. The stock trades at a forward price-to-earnings ratio of 24, slightly below peers, with Goldman setting a price target of 586 Danish krone, suggesting a 42% upside.
Japan’s Kawasaki Heavy Industries (KHI) also makes the list, known for manufacturing motorcycles and defense equipment. Despite underperforming compared to peers, Goldman sees its valuation as an opportunity due to KHI’s strong aerospace and defense sector presence. Analyst Yuichiro Isayama forecasts growth in profits and margins, supported by Japan’s updated defense policies. With a target price of 8,000 yen, the stock has a potential upside of 43.2%.
Additionally, Goldman favors PetroChina, predicting a 47% upside with a target price of 8.1 Hong Kong dollars. Analyst Nikhil Bhandari highlights PetroChina’s robust cash flow and increased gas production, which could soon dominate its earnings mix over oil. PetroChina is also noted for an expected free cash flow yield of 15% and an 8% dividend yield by 2025, reinforcing its financial resilience.
These strategic picks underscore Goldman’s intent to leverage specific sector strengths for rewarding investment opportunities.
Original Story https://www.cnbc.com/2024/12/03/goldman-reveals-3-global-stocks-on-its-conviction-lists-with-over-40percent-upside.html
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