Goldman Sachs has identified three undervalued stocks with significant potential for share price appreciation over the next 12 months. These “attractive” value stocks include British Airways parent International Consolidated Airlines Group, vehicle manufacturer CNH Industrial, and health technology company Philips. The analysts at Goldman Sachs believe that these companies stand out among their European peers for their cheap valuations compared to their earnings growth prospects, making them appealing investment opportunities.
The bank’s airline analyst, Patrick Creuset, upgraded IAG to a buy rating after noting that the stock had not fully reacted to consensus earnings upgrades from analysts. Creuset predicts a potential 64% rally in IAG’s 2024 earnings, while Goldman Sachs expects Philips shares to rise by 51% over the next year based on robust margin progression. Additionally, the investment bank has upgraded CNH to a buy rating, expecting shares to increase by 57% to $19 a share due to the company’s potential for profit margin growth through cost cuts and pricing power. These predictions point to significant potential upside for investors considering these value stocks.
Goldman Sachs’ analysis highlights the disparity between the current stock prices and the potential earnings growth for these companies. The bank’s bullish outlook on British Airways parent International Consolidated Airlines Group, CNH Industrial, and health technology company Philips underscores their confidence in the significant share price appreciation for these “attractive” value stocks over the next 12 months. This provides an opportunity for investors looking to capitalize on the potential undervaluation of these European companies in the current market.