Goldman adds a utility stock to its list of elite picks for clients
As the third quarter and second half open, Goldman Sachs is adding a key utility stock to its high-conviction stock list. Goldman added the Southern Company to its recently launched Conviction List- Directors’ Cut, calling the Atlanta-based utility a top idea with “below average regulatory risk” and “uniquely positioned to provide above average clean energy growth.” The firm views Southern’s Vogtle Units 3 and 4 nuclear project as a “key growth enabler,” with the market likely underappreciating the potential tailwinds from building the first U.S. nuclear power plant in decades. Nuclear energy, in general, should benefit from some of the production tax credits within the Inflation Reduction Act and drive faster-than-expected EPS growth through 2027, Goldman said. The Wall Street firm sees 14% upside for Southern, which is down about 1% year to date. Steven Kron, Goldman’s director of Americas equity research, described the list, rolled out last month, as a “curated and active” registry of 20 to 25 stocks that Goldman views as its “most differentiated fundamental buy ideas” within its U.S. stock coverage. These are some of the other names that made the cut: Goldman views the potential launch of an iPhone 15 come September as a big potential catalyst for shares of Apple. The technology behemoth on Friday closed above a $3 trillion market capitalization for the first time ever. Key to Goldman’s bet on Apple is the company’s services expansion, which should benefit growth in its installed base. Like its peers, Apple shares have been on a tear in 2023, surging roughly 49% in the first half as Wall Street bet on artificial intelligence and returned to tech after a terrible 2022. Even with Apple’s strong start to the year, Goldman sees about 8% further upside ahead. AAPL YTD mountain Apple shares in 2023 While declining poly-silicon prices contributed to souring sentiment on First Solar in recent months, Goldman continues to see an “attractive risk-reward and setup” into the second half, driven by capacity expansion and a September analyst day. The bank’s price target suggests 43% upside for First Solar, on top of a 30% gain so far this year. WW International is positioned for the most upside potential among all the stocks on Goldman’s list, with a $13 price target implying that shares can nearly double. The diet company, making a push into obesity drugs with its planned acquisition of telehealth platform Sequence, could see more than 20% upside to consensus EPS estimates and 30% revenue growth, according to Goldman. Other key names highlighted in the list include Amazon , Warner Bros Discovery , Merck and JPMorgan Chase . — CNBC’s Michael Bloom contributed reporting
