Goldman Sachs has identified several buy-rated stocks that they find simply irresistible, even in the face of economic uncertainties. Among those well-positioned to weather the storm are names like Walmart, Cheesecake Factory, Smithfield Foods, and Ducommun.
Walmart
Walmart’s stock has surged over 50% in the last year, yet there’s still more room to grow, according to analyst Kate McShane. She reaffirmed her support for the retail powerhouse following its fiscal fourth-quarter earnings, which surpassed expectations despite issuing a somewhat underwhelming forecast. McShane remains optimistic about "continued share gains" and "solid earnings growth" projected for 2025, highlighting Walmart’s "compelling proposition for value and convenience" alongside improving profitability. A critical event on the horizon is the April investor meeting, expected to shed light on strategy updates and initiatives like automation, potentially boosting the stock. McShane maintains a Buy rating for Walmart, with a price target of $106.
Smithfield Foods
Leah Jordan, an analyst from Goldman, recently turned her attention to Smithfield Foods, offering a buy rating. She credits the pork producer’s promising growth story to its top-tier packaged meats portfolio, which benefits from the consumer shift towards high-protein diets and the demand for value-added options. Furthermore, Smithfield’s profit margins are improving due to their strong track record of profitability. The recent 8% dip in Smithfield’s stock price might present a savvy investment opportunity. Jordan outlines a “compelling total return profile,” with impressive earnings growth and a roughly 5.5% dividend yield, underpinned by robust free cash flow and low leverage.
Ducommun
Don’t overlook Ducommun, as urged by analyst Noah Poponak. The aerospace engineering services firm is seen as undervalued, with an enticing medium-term prospect for growth and margin expansion in the aerospace sector. Despite a mixed fourth-quarter report, Poponak stands firm on the stock, praising its steadily improving margins and cash flow conversion, buoyed by commercial aerospace growth. Even with an 11% drop in the stock this year, Poponak notes that the fundamentals are on the mend, making the shares too good to pass up.
Cheesecake Factory
Lastly, Cheesecake Factory delivered a robust fourth quarter, reaffirming its reputation for best-in-class unit growth. The results support the bullish outlook for the brand, which is seen as offering the most enticing unit growth story among full-service restaurants. Their latest menu introduces over 20 new items, reflecting their unique strategy of offering a wide variety of options to appeal to diverse customer tastes, aiming to ensure there’s something for everyone.
Each of these companies holds promising potential, attracting attention within the financial sector as compelling investment opportunities amidst uncertainty.
