Goldman Sachs Predicts “Year of the Stock Picker”: 18 Buys, 7 Sells – Are You Ready?

As the crucial third-quarter earnings season looms, Goldman Sachs has released a significant note, offering investors a roadmap to navigate the potentially volatile market and identify promising investment opportunities. The firm’s analysts, led by John Marshall, pinpoint 18 stocks poised for potential upside based on anticipated positive earnings revisions, while simultaneously flagging seven others that may face downward revisions. This strategic insight, coupled with Goldman Sachs’ forecast of a **10% upside** for the average S&P 500 stock over the next year, paints a compelling picture for discerning investors willing to embrace a selective, rather than broad-market, approach.

Key Takeaways: Goldman Sachs’ Earnings Season Outlook

• Goldman Sachs predicts a **10% upside** for the average S&P 500 stock in the next 12 months, calling 2024 “the year of the stock picker.”
• The firm highlights **18 stocks** expected to benefit from positive earnings revisions and **7 stocks** potentially facing downward revisions.
• Single-stock volatility around earnings announcements remains at a **14-year high**, emphasizing the importance of selective investment strategies.
• Goldman Sachs recommends **options-based strategies**, suggesting buying options before earnings and selling after to leverage price fluctuations.

Navigating the Volatility: A Stock Picker’s Market

Goldman Sachs’ characterization of 2024 as “the year of the stock picker” underscores the current market’s nuanced reality. With significant debates surrounding artificial intelligence, interest rates, and the upcoming US elections, market participants are facing heightened uncertainty. This uncertainty is driving the currently elevated single-stock volatility, a trend which, according to the firm, will likely persist through the remainder of the year. “We expect earnings day moves to remain elevated as most of the key debates for the market have winners and losers in the equity space,” the note emphasizes. This volatility, however, presents opportunities for savvy investors who can identify the potential winners and losers among individual stocks.

Options Strategies: A Volatility Play

Given this heightened volatility, Goldman Sachs advocates for deploying options-based strategies. They specifically advise investors to consider buying options *before* earnings announcements, capitalizing on anticipated price movements based on their predictions. Conversely, the firm recommends selling options *between* earnings periods, taking advantage of any price stabilization to generate income. This approach allows for a more sophisticated and potentially more profitable participation in the market while acknowledging and leveraging the inherent volatility around earnings releases.

Goldman Sachs’ Bullish Picks: 18 Stocks for Potential Upside

Goldman Sachs’ analysts have meticulously identified 18 companies they believe will experience positive revisions to their earnings forecasts. This list spans several key sectors, demonstrating the firm’s faith in specific companies across a diverse economic landscape. The following table outlines this selection, including the company, sector, and estimated earnings announcement date.

Detailed Analysis of Goldman Sachs’ Bullish Picks

While a comprehensive analysis of each company is beyond the scope of this article, it’s important to note the diversity of sectors represented. The inclusion of companies like Nvidia (NVDA), a leader in the booming AI space, showcases the firm’s recognition of the sector’s immense growth potential. Simultaneously, the presence of established players such as Citigroup (C) and Merck (MRK) reflects a balanced approach, suggesting confidence in both growth and established blue-chip companies. Further research into each company’s specific situation is crucial for any investor considering adding these equities to their portfolio.

Goldman Sachs’ Cautious Outlook: 7 Stocks Facing Potential Downward Revisions

Conversely, Goldman Sachs’ analysis also identifies seven stocks where they anticipate downward revisions to earnings estimates. This list underscores the importance of careful due diligence and a sector-specific perspective when engaging with the earnings season. Investors should exercise caution and thoroughly research any of these companies before making investment decisions.

**Disclaimer:** This article provides general information and does not constitute financial advice. Investors should conduct their own thorough research and consider consulting with a financial advisor before making any investment decisions.