Here are Goldman's best of the best stock picks heading into August

CNBC

5 days ago

As the new month kicks off, Goldman Sachs is adding commercial insurance stock Aon to its list of top stock picks. Friday's slump notwithstanding, stocks enter August near all-time highs after staging a dramatic recovery from their lows of the year in April, following President Donald Trump's unveiling of new global tariff policies. Corporate earnings growth, moderate economic data, expectations that the Federal Reserve may soon resume cutting interest rates and progress in trade talks have all served as upward catalysts in recent weeks. As it does each month, Goldman Sachs took the opportunity to refresh the "directors' cut" version of its U.S. conviction list, highlighting the best of Goldman Sachs' buy-rated U.S. stock ideas. Some stocks from Goldman's list are included in the table below. All prices are as of July 31. Goldman's newest addition to the list was Aon, the reinsurance and health and benefit provider that's down about 2% this year. Goldman's $430 price target implies that shares of Aon could rise 21% from here. "Talent + synergies + M & A/capital markets recovery = lots of free cash flow," Goldman Sachs wrote. "AON is poised to deliver stronger than consensus 2026 organic growth and free cash flow (FCF 9%+ above Visible Alpha consensus for 2026/2027) supported by talent investments (more brokers), NFP acquisition synergies (acquired in 2024), and a recovery in M & A and capital markets activity." Aon bought National Financial Partners in April 2024. Of Wall Street analysts covering Aon, more than half, or 55%, rate it a buy. Social media platform Pinterest was another of Goldman's top stock picks. Shares have surged 29% this year, but the investment bank's target price implies the stock could rally another 11% from current levels. More than four fifths, or 81%, of all analysts covering Pinterest rate it a buy. On Monday, Guggenheim analyst Michael Morris reiterated a buy opinion while raising price target on Pinterest to $44 per share from $39. The revised forecast is 14% above where shares of Pinterest closed Thursday. "We remain confident in the PINS story ahead of 2Q earnings as we see the company in the early stages of its monetization opportunity, with progress on Performance+ (particularly AI-related investments) and expanding strategic partnerships (Magnite, Instacart, LTK Influencer Content, Amazon/Google integrations), the primary drivers of near-term revenue growth," he wrote, referring to LTK, a platform that connects social media influencers with their followers to promote shopping. "Overall, we continue to see attractive value at this scaling digital ad player and remain confident in management's ability to execute on several near-term growth initiatives," Morris added. Duke Energy was also on the Goldman list. The Charlotte-based utility has gained more than 14% this year, outperforming the S & P 500, and could rise another 9% from here, Goldman said. In June, Goldman analyst Carly Davenport upgraded Duke to buy from neutral. "The stock has lagged more defensive peers YTD and is making regulatory progress towards building significant generation that is not captured at current levels in our view," she wrote in a note to clients. "We upgrade Duke Energy (DUK) to Buy from Neutral as we become more constructive on the company's outlook from a load growth, generation capex, regulatory and balance sheet perspective and view valuation as more compelling as the stock trades at a discount to other premium utilities." Of all Wall Street analysts covering Duke, a little less than half, or 45%, also rate it buy.