Michael M. Santiago
Amid the recent outperformance of megacap tech and other AI beneficiaries, Goldman Sachs raised its S&P 500 year-end price target to 4,500 from 4,000, suggesting a potential upside of 2% per year. from the current level of 4,400.
For bulls who thinks the rest of the market will start to participate in the Big-Tech rally, Goldman looked at the compound cyclical laggards of Russell 3000 (IWV) stocks with a market capitalization of more than $2 billion.
These stocks have demonstrated year-to-date underperformance against the S&P 500 (SP500) (SPY) and are currently trading at consensus forward P/E ratios below 19x. Notably, despite their underperformance, these stocks saw positive 2024 EPS revisions of 5% or more, indicating potential fundamental improvement.
Inventories by sector are:
Basic materials
- Cacti (NYSE: WHD), since the start of 2024 estimated EPS revision 19%
- Expro Group Holdings NV (XPRO), 18%
- Noble Corporation (NE), 8%
- Newmont Corporation (NEM), 17%
- Cleveland Cliffs (CLF), 15%
- Golar LNG Limited (GLNG), 6%
- CONSOL Energy (CEIX), 6%
- Murphy United States (MUSA), 12%
Consumer goods and services
- fangs (NASDAQ:CROX), 7%
- Kontoor brands (KTB), 6%
- Dillard (DDS), 6%
- Société Anonyme Allégion (ALLE), 5%
- Original Parts Company (GPC), 6%
- Ryder (R) system, 11%
- SeaWorld Entertainment (SEAS), 11%
- Applied Industrial Technologies (AIT), 13%
- United Rentals (URI), 7%
- Rush Enterprises (RUSHA), 5%
finance
- Federated Hermès (FHI), 11%
- Interactive Brokers Group (IBKR), 11%
- Evercore (EVR), 7%
- Piper Sandler Companies (PIPR), 6%
- Ameriprise Financial (AMP), 5%
- Credit Acceptance Company (CACC), 17%
- U.S. Equity Investment Life Holding (AEL), 19%
- CNO Financial Group (CNO), 18%
- Everest Re Group (RE), 17%
- Renaissance Re Holdings (RNR), 17%
- Unum Group (UNM), 15%
- Enstar Group Limited (ESGR), 10%
- Assured Guarantee (AGO), 10%
- Globe Life (GL), 8%
- International Society of the Old Republic (NYSE: ORI), 7%
- Genworth Financial (GNW), 6%
- Reinsurance Group of America (RGA), 6%
- Aflac Incorporated (AFL), 5%
- AGNC Investment (AGNC), 16%
- Rhythm Capital (RITM), 7%
Industrial
- Textron (NYSE:TXT), 13%
- UFP Industries (UFPI), 8%
- Fluor Corporation (FLR), 12%
- Deere & Company (NYSE:DE), ten%
- Caterpillar (NYSE: CAT), 9%
- AGCO Corporation (AGCO), 6%
- Gates Industrial Corporation (GTES), 5%
Technology
- NetScout Systems (NTCT), 10%
- Cisco (NASDAQ: CSCO), 6%
Learn more about stock markets:
- Goldman Projects AI’s Impact on Fair Value and S&P Earnings 20 Years Ago
- Goldman’s Kostin gets bullish on S&P, Morgan Stanley’s Wilson says the bear is still alive
