Goldman Sachs says buy these five stocks that are set to pop
Goldman Sachs revealed recently several buy-rated stocks that analysts at the investment bank say are set to rise. The Wall Street firm says these companies are resilient and that investors should quickly buy them. CNBC Pro combed through Goldman Sachs research to find five stocks that it says have more upside. They include: Microsoft , KinderCare, Lyft, Woodward and Diamondback. KinderCare Buy the dip in shares of the early childhood learning company, according to analyst George Tong While KinderCare's most recent earnings report was mixed, Goldman is doubliing down on the stock. "While sales cycles have elongated, the company noted healthy growth in parental inquiries, communications and tours, which create a healthy pipeline that can convert during the seasonally strong summer months," Tong wrote. The bank also says it's optimistic that there will be no changes in President Trump's budget outline, which is a positive for the Child Care and Development Block Grant that assists low-income families. This in turn should help KinderCare revenue growth, Tong added. With shares down more than 34% this year, Tong urged clients to quickly accumulate shares. "KinderCare's business model is resilient in an uncertain macro environment given child care services are essential, with broader demand outpacing supply," he went on to say. Diamondback Energy The energy and natural gas company is firing on all cylinders, Goldman wrote recently. Analyst Neil Mehta sees a compelling entry point as shares are down about 17% this year. "As an industry cost-leader, FANG's execution strength can continue to drive capital efficiency improvements over time in our view," he wrote. Mehta likes Diamondback's robust free-cash flow and understands shareholders have concerns about the price of oil. "Investors also highlight risks associated with waiting for a more constructive near- to medium-term oil price to add barrels given timing the market can be challenging," he said. Still, Goldman is sticking with the stock. "We reiterate our Buy rating on FANG and remain constructive on FANG's consistency of execution strength following strong operating and financial results in 1Q25," the bank said. Woodward The aerospace and defense company is seeing robust demand, analyst Noah Poponak wrote, citing several catalysts ahead. Poponak recently held a series of meetings with Woodward's investor relations team and came away feeling even more bullish about the stock. "Aerospace aftermarket fundamentals are strong, including units, price and pent-up demand," the analyst wrote. Further, Poponak says military spending growth remains robust and aerospace manufacturing is picking up. "Industrial indicators are solid, including high levels of power demand," he added. The bank has a Street high, 12-month price target of $229 on the stock, and Woodward remains a top pick and is on Goldman's prestigious conviction buy list. "Multiple growth and margin drivers across the business," Poponak added. Woodward shares are up 25% this year. KinderCare "While sales cycles have elongated, the company noted healthy growth in parental inquiries, communications and tours, which create a healthy pipeline that can convert during the seasonally strong summer months. ... .KinderCare's business model is resilient in an uncertain macro environment given child care services are essential, with broader demand outpacing supply." Lyft "Strong Execution in a Stable Industry Backdrop. ... .While short-term debates will likely stay rooted in industry trends around rideshare pricing, market share fluctuations, positioning against the [autonomous vehicle] theme and/or any changes in consumer discretionary behavior, we believe that shares are dislocated from LYFT's earnings power in the next 2-3 years and upgrade the stock to Buy." Read more about this call here. Diamondback Energy "As an industry cost-leader, FANG's execution strength can continue to drive capital efficiency improvements over time in our view. ... .Investors also highlight risks associated with waiting for a more constructive near- to medium-term oil price to add barrels given timing market can be challenging ... We reiterate our Buy rating on FANG & remain constructive on FANG's consistency of execution strength following strong operating & financial results in 1Q25." Microsoft "With a strong presence across all layers of the cloud stack, including applications, platforms & infrastructure, MSFT is well-positioned, in our view, to capitalize on a number of long-term secular trends, such as Gen-AI, public cloud consumption, SaaS adoption, digital transformation, AI/ML, BI/analytics, & DevOps." Read more about this call here. Woodward "Multiple growth and margin drivers across the business ... Aerospace aftermarket fundamentals are strong, including units, price and pent-up demand ... Aerospace OE is starting to improve. Defense growth is solid, and [joint direct attack munition] is unique for WWD. Industrial indicators are solid, including high levels of power demand."
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