VEEV - Goldman leans to growth picks in either recession scenario
2023-04-03 05:21:52 ET
Goldman Sachs is sticking with its S&P 500 ( SP500 ) ( NYSEARCA: SPY ) target of little change by year end as valuations and earnings face headwinds near term, its equity team said.
"Our Long Duration basket has outperformed the Short Duration basket by 6 pp YTD (2% vs. 8%)," stragist David Kostin wrote in a note. "This has created an asymmetry that supports our recommendation ... to own high-margin growth stocks vs. low-margin growth stocks."
"If the economy avoids recession, real yields are likely to rise and pose a headwind to low-margin growth stocks," Kostin said. "If the economy enters recession investors will likely rotate toward stocks with 'quality' attributes, including high profit margins."
Goldman selected high-margin stocks growth stocks from the Russell 3000 ( IWV ) excluding Biotech, Financials, Real Estate and Energy with market cap above $1B and revenue of $100M.
The stocks by sector are:
Communications Services
- Take-Two ( TTWO ), second twelve months sales growth consensus 25%, net margin consensus 17%
Consumer Discretionary
For further details see:
Goldman leans to growth picks in either recession scenario