MSFT - Goldman Sachs picks top stocks in case of a hard landing
2023-05-23 07:39:57 ET
Goldman Sachs is more bullish on the U.S. economy than the rest of Wall Street. But its equity team has a list of stocks in case a hard landing from the tightening cycle materializes.
Goldman's economists put the chance of a recession at 35%, compared with the Wall Street consensus of a 60% chance.
If a soft landing happens, the S&P 500 ( SP500 ) ( NYSEARCA: SPY ) ( IVV ) ( VOO ) is still likely to fall to 4,000. But it would slump to a trough of 3,150 with a hard landing, Goldman's analysts say.
In that scenario, Goldman advises moving cash to stocks with low valuations, strong balance sheets and solid dividend yield.
The stocks picked from the Russell 1000 ( IWB ) are:
- Activision Blizzard ( NASDAQ: ATVI ), next 12 months PE 19x, Altman z-score (credit strength test where above 3 is considered good) 6, last 12 months dividend yield 0%
- Electronic Arts ( EA ), 18x, N/A, 1%
- Costco ( COST ), 33x, 8, 1%
- Sysco ( SYY ), 17x, 6, 3%
- Coca-Cola ( KO ), 24x, 4, 3%
- Philip Morris ( PM ), 15x, 3, 5%
- Altria ( MO ), 9x, 4, 8%
- Archer-Daniels-Midland ( ADM ), 11x, 4, 2%
- Constellation Brands ( STZ ), 19x, 3, 1%
- Brown-Forman ( BF.B ), 31x, 8, 1%
- Hormel ( HRL ), 22x, 5, 3%
- Lamb Weston ( LW ), 23x, 4, 1%
- Bunge Limited ( BG ), 8x, 5, 3%
- Colgate-Palmolive ( CL ), 25x, 7, 2%
- Church & Dwight ( CHD ), 30x, 4, 1%
- Abbott Labs ( ABT ), 25x, 5, 2%
- Medtronic ( MDT ), 17x, 3, 3%
- ResMed ( RMD ), 32x, 13, 1%
- Laboratory Corp. of America ( LH ), 13x, 3, 1%
- Steris ( STE ), 24x, N/A, 1%
- Teleflex ( TFX ), 18x, 4, 1%
- Johnson & Johnson ( JNJ ), 15x, 4, 3%
- Pfizer ( PFE ), 11x, 4, 4%
- Thermo Fisher ( TMO ), 21x. 4, 0%
- Danaher ( DHR ), 23x, 5, 0%
- Zoetis ( ZTS ), 33x, 7, 1%
- Agilent Technologies ( A ), 21x, 6, 1%
- Microsoft ( MSFT ), 29x, 8, 1%
- Accenture ( ACN ), 23x, 7, 2%
- Intuit ( INTU ), 28x, 8, 1%
- Roper Technologies ( ROP ), 28x, 4, 1%
- Cognizant Technology Solutions ( CTSH ), 14x, 6, 2%
More on the economy
- St. Louis Fed's Bullard sees two more rates increases this year
- Economic indicators may be more ambiguous than commonly realized
- Bostic 'comfortable' with Fed pause, Barkin refrains from predicting June policy move
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Goldman Sachs picks top stocks in case of a hard landing