Wall Street strategists are bracing for the potential of two more interest rate hikes and a possible 20% or larger sell-off in the stock market, amidst a year dominated by an artificial intelligence rally led by the "Magnificent 7." Against this backdrop, Goldman Sachs has identified several stocks from its Conviction List that present strong growth potential for investors, based on their substantial upside to the bank's price targets.
Among the highlighted stocks is Bath & Body Works Inc. (NYSE: NYSE:BBWI), a specialty retailer of home fragrance, body care, soaps, and sanitizer products. The company is expected to have a strong holiday season, with recent initiatives driving better-than-expected earnings. Goldman Sachs has set a price target for Bath & Body Works at $52, a potential 57% gain from Tuesday's close of $31.70.
First Solar Inc . (NASDAQ: NASDAQ:FSLR), a provider of photovoltaic solar energy solutions, was also identified as having substantial growth potential. The company recently began construction on its fifth manufacturing facility in Iberia Parish, Louisiana. Goldman Sachs has set a price target of $296 for First Solar, indicating an 80% gain from Tuesday's close of $161.39.
Another company spotlighted was Salesforce Inc. (NYSE: NYSE:CRM), a pioneer in customer relationship management software. The bank's price target for Salesforce stands at $340, representing a potential gain of nearly 65% from Monday's closing price of $202.49.
Shift4 Payments Inc. (NYSE: FOUR), which provides software and payment processing solutions, is considered to have significant upside potential and is seen by some as a takeover target. Goldman Sachs has set its target price at $87 for Shift4 Payments, indicating a potential 58% gain from Thursday's close of $54.60.
Warner Bros. Discovery Inc. (NASDAQ: NASDAQ:WBD) was also highlighted, with the recent merger between the two companies providing an attractive entry point for investors. Goldman Sachs has set a price target of $20 for Warner Bros. Discovery, suggesting an 87% gain from Tuesday's close of $10.69.
Finally, WW International Inc. (NASDAQ: NASDAQ:WW), a provider of weight management products and services, was identified as having strong growth potential. The bank's price target for WW International stands at $17, representing a potential 60% gain from Tuesday's close of $10.29.
As third-quarter earnings are approaching, Goldman Sachs advises investors to consider buying partial positions and monitor the incoming results. These top stocks are currently trading well below their 52-week highs, offering investors attractive entry points into some of the top picks from one of the world's leading investment banks.
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