Goldman Sachs has published their “out-of-consensus” stock picks, which are companies especially loved and highlighted by GS--far more than the average Wall Street firm. One of the names was Tesla (NASDAQ: TSLA), which Goldman believes is "underappreciated by the market." The firm sees Tesla shares having 20% upside to their target.
Deep Mehta, a vice president at Goldman Sachs, said he and his team were looking for stocks that, judging by their research, might be a reliable choice, but unloved by most Wall Street firms. The analyst wrote that these shares represent “buy-rated names where our analysts are out-of-consensus, and the majority of the Street is Neutral or Sell rated.” Despite the fact that such stocks are undervalued by the market, they can bring huge benefits to investors who have different opinions from the majority, said Mehta.
"These names appear underappreciated by the market and could generate alpha for investors with a contrarian view."
The firm examined its buy-rated stocks with 10% or more upside potential from the target price and compared them to analyst ratings at other sell-side brokerages across Wall Street. Thereafter, Goldman narrowed the list of stocks that it considers favorable to those that other firms do not find attractive, and for which less than half of all sell-side analysts recommend clients buy. As a result of the analysis, many great names have been found. Tesla, along with green energy company SunPower and Covid-19 vaccine manufacturer Moderna, made the list.
|Upside to Goldman target
|% buy ratings on Street
Source: Goldman Sachs
Goldman's list covers a variety of investing styles and includes trades popular with investors who are betting on a sustainable economic recovery, as well as some popular technology-related trades.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.