Goldman Sachs has identified CAE as an undervalued stock with significant growth potential. The Canadian training and simulation provider has been unfairly punished in the market due to struggles in its civil aviation and defense divisions. However, analyst Noah Poponak believes that the stock is undervalued and offers a compelling investment opportunity. Despite a 17% decline in share price this year, Poponak sees CAE as a “significantly undervalued commercial aerospace asset” and recommends buying the dip.
BJ’s Wholesale Club: A Retailer on the Rise
BJ’s Wholesale Club is another stock recommended by Goldman Sachs for its strong performance and growth potential. Analyst Kate McShane notes that BJ’s is firing on all cylinders, with burgeoning membership trends and strong traffic. The company’s earnings potential is robust, driven by factors such as unit volume growth in grocery categories and customer engagement. With a 20% increase in share price this year, BJ’s is seen as having more room to run, especially with its long runway for new club growth.
Workday is highlighted as a growth opportunity by Goldman Sachs, thanks to its strategy implementation and strong performance in the enterprise cloud management sector. Analyst Kash Rangan believes that Workday is on track to become a $20bn+ business, catalyzed by the shift of financials to the cloud. With a 25% increase in share price in the past three months, Workday is attractively valued and positioned for long-term growth.
Goldman Sachs is optimistic about CrowdStrike’s future prospects, expecting the company to return to 20%+ revenue growth and 30%+ EPS growth over the next 12-24 months. Management’s commentary and industry conversations suggest a positive outlook for CrowdStrike, with a focus on transparency and engagement to regain its leadership position in the industry. With a thoughtful playbook in place, CrowdStrike is poised for success in the cybersecurity sector.
Ducommun is identified as a stock with a strong growth outlook by Goldman Sachs, benefiting from its exposure to aerospace original equipment and aftermarket segments. The company is expected to capitalize on the ramp-up in aerospace production to meet growing demand. Despite pressures in its defense business, recent orders and easier compares are likely to accelerate growth in that segment. Ducommun is positioned to take advantage of the positive fundamentals in the aerospace industry.
Overall, Goldman Sachs’s recommendations for these five undervalued stocks reflect a bullish outlook on their growth potential and investment opportunities. With a focus on sectors such as aerospace, retail, and cloud management, these stocks offer compelling opportunities for investors looking to capitalize on undervalued assets with significant upside potential.