Michael M. Santiago
Amidst the recent outperformance of megacap tech and other AI beneficiaries, Goldman Sachs has raised its S&P 500 year-end price target to 4,500 from 4,000, suggesting a potential upside of 2% from the current level of 4,400.
For bulls that believe the rest of the market will start participating on the Big-Tech rally, Goldman screened cyclical laggards consisting of Russell 3000 (IWV) stocks with market capitalizations exceeding $2 billion.
These stocks have demonstrated YTD underperformance compared to the S&P 500 (SP500) (SPY) and currently trade at consensus forward P/E ratios below 19x. Notably, despite their underperformance, these stocks have experienced positive revisions to their 2024 EPS of 5% or more, indicating potential fundamental improvement.
The stocks by sectors are:
Basic Materials
- Cactus (NYSE:WHD), year to date 2024 estimated EPS revision 19%
- Expro Group Holdings N.V. (XPRO), 18%
- Noble Corporation (NE), 8%
- Newmont Corporation (NEM), 17%
- Cleveland-Cliffs (CLF), 15%
- Golar LNG Limited (GLNG), 6%
- CONSOL Energy (CEIX), 6%
- Murphy USA (MUSA), 12%
Consumer Goods and Services
- Crocs (NASDAQ:CROX), 7%
- Kontoor Brands (KTB), 6%
- Dillard’s (DDS), 6%
- Allegion Public Limited Company (ALLE), 5%
- Genuine Parts Company (GPC), 6%
- Ryder System (R), 11%
- SeaWorld Entertainment (SEAS), 11%
- Applied Industrial Technologies (AIT), 13%
- United Rentals (URI), 7%
- Rush Enterprises (RUSHA), 5%
Financials
- Federated Hermes (FHI), 11%
- Interactive Brokers Group (IBKR), 11%
- Evercore (EVR), 7%
- Piper Sandler Companies (PIPR), 6%
- Ameriprise Financial (AMP), 5%
- Credit Acceptance Corporation (CACC), 17%
- American Equity Investment Life Holding (AEL), 19%
- CNO Financial Group (CNO), 18%
- Everest Re Group (RE), 17%
- Renaissance Re Holdings (RNR), 17%
- Unum Group (UNM), 15%
- Enstar Group Limited (ESGR), 10%
- Assured Guaranty (AGO), 10%
- Globe Life (GL), 8%
- Old Republic International Corporation (NYSE:ORI), 7%
- Genworth Financial (GNW), 6%
- Reinsurance Group of America (RGA), 6%
- Aflac Incorporated (AFL), 5%
- AGNC Investment (AGNC), 16%
- Rithm Capital (RITM), 7%
Industrial
- Textron (NYSE:TXT), 13%
- UFP Industries (UFPI), 8%
- Fluor Corporation (FLR), 12%
- Deere & Company (NYSE:DE), 10%
- Caterpillar (NYSE:CAT), 9%
- AGCO Corporation (AGCO), 6%
- Gates Industrial Corporation (GTES), 5%
Technology
- NetScout Systems (NTCT), 10%
- Cisco (NASDAQ:CSCO), 6%
More on the stock markets:
- Goldman projects AI’s impact on S&P fair value and earnings over 20 years
- Goldman’s Kostin gets bullish on S&P, Morgan Stanley’s Wilson says bear still alive
