4 C
New York
Sunday, December 8, 2024

Goldman Sachs’ Japan Stock Picks: Are These the Next Big Winners?

All copyrighted images used with permission of the respective Owners.

Goldman Sachs Sees Opportunity in Japanese Stocks After Market Volatility

Despite a recent surge in volatility in Japan’s stock market, Goldman Sachs remains optimistic about the country’s prospects, identifying several opportunities for investors. The bank’s analysts highlighted three Japanese stocks with significant upside potential, adding them to their conviction list. These stocks are listed on the Tokyo Stock Exchange and offer investors the opportunity to invest through American Depository Receipts (ADRs) in the U.S. market.

Key Takeaways:

  • Volatility Despite Resurgence: Japan’s stock market experienced a significant downturn in early August, with the Topix and Nikkei indexes suffering their worst declines since 1987. However, despite the initial shock, both indexes have since recovered some of their losses.
  • Goldman’s Conviction List: The bank’s analysts have identified three Japanese stocks with strong growth potential, adding them to their conviction list, which features their top buy-rated stock ideas.
  • Three Stocks with Significant Upside Potential: These stocks are Asics Corporation, Suntory Beverage & Food, and Hitachi. The analysts anticipate potential upsides of over 40% for these stocks over the next 12 months.

Asics Corporation: A Strong Brand Fuels Growth

Goldman Sachs is particularly bullish on Asics Corporation, a sportswear company known for its performance running shoes, athletic wear, and the Onitsuka Tiger sneaker brand. Analyst Sho Kawano believes that Asics’ profitability will improve, fueled by strong sales in the performance running segment and the spillover effects across their shoe categories.

Asics shares have already experienced impressive growth, rising 99.5% year-to-date. Goldman has set a target price of 3,100 Japanese Yen ($21.07) for the stock, representing a potential upside of approximately 50%.

Suntory Beverage & Food: Focused Growth and Undervaluation

Goldman describes Suntory Beverage & Food as a leading Japanese soft drinks manufacturer with the second-largest market share in Japan. The company also operates in Europe, the U.S., and other parts of the Asia Pacific region.

Analyst Takashi Miyazaki predicts that Suntory’s profits will grow at a compound annual growth rate of 10% over the next three years. This growth trajectory is attributed to the company’s focus on core brands and the recent peak in raw material costs. Miyazaki believes that Suntory’s shares are currently "undervalued." Despite a modest 3.5% year-to-date gain, Goldman has set a target price of 6,900 Japanese Yen for the stock, implying a potential upside of 37%.

Hitachi: Next Phase of Growth

Hitachi, a conglomerate operating in diverse sectors such as power, renewable energy, railway services, and healthcare products, is also featured on Goldman’s list. Analyst Ryo Harada sees Hitachi entering the "next phase" of its growth journey.

Harada believes that the company is poised to benefit from multiple expansion driven by higher corporate value, fueled by earnings per share (EPS) expansion and the growth of its services business. Hitachi’s shares have gained nearly 60% year-to-date and Goldman has set a target price of 4,850 Japanese Yen for the stock, indicating a potential upside of approximately 54%.

Goldman Sachs’ optimistic stance on these Japanese stocks signifies their belief in the resilience of the Japanese economy and the potential for growth in specific sectors. Investors looking to diversify their portfolios into the Japanese market may find these stocks particularly attractive, given their potential for substantial gains and their exposure to a variety of sectors. However, it’s crucial to remember that investing carries risks, and potential upsides are not guaranteed.

Before making any investment decisions, thorough research and consultation with financial advisors are strongly recommended. Investors should consider factors such as their risk tolerance, investment goals, and a comprehensive understanding of the Japanese market and its economic outlook before investing in any of the stocks highlighted by Goldman Sachs.

Article Reference

Sarah Thompson
Sarah Thompson
Sarah Thompson is a seasoned journalist with over a decade of experience in breaking news and current affairs.

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

South Korea’s President Under Siege: Martial Law Fallout Leads to Crackdown?

South Korea is grappling with its deepest political crisis in decades following President Yoon Suk Yeol's ill-fated attempt to impose martial law. The...

Damascus Falls: Is the Assad Dynasty Finally Over?

Syrian Rebels Seize Damascus: Assad Regime on the Brink of CollapseIn a stunning turn of events, rebel forces have seized control of Damascus, the...

Gay Rights Index: A New Battleground in the Culture Wars?

As Pride Month 2024 concluded, a wave of unexpected announcements rippled through corporate America. Starting with Tractor Supply Co., major retailers and manufacturers...