Goldman Sachs says now's the time to buy these 7 stocks

Published Sun, Nov 21 20216:10 PM ESTUpdated Mon, Nov 22 20218:02 AM EST

Analysts at Goldman Sachs have upgraded a slew of global stocks to "buy" over the past few weeks, with the investment bank picking out opportunities related to the global chip shortage and the economic recovery. The global economy continues to grapple with the effects of a semiconductor shortage and a gradual Covid-19 reopening that has rippled through industries such as aviation and business services. Stocks related to electric and autonomous vehicles have also been in focus this year amid talk of a green transition. CNBC highlights seven stocks within these themes that were upgraded by Goldman to buy this month. Three semiconductor stocks were upgraded to buy by the Wall Street firm earlier this month, including U.S. chip maker Qualcomm . One of the world's leading semiconductor companies, Qualcomm is expecting earnings per share growth of more than 20% for next year on "expected better high-end Android momentum as well as broader based positive expectations in other business lines," Goldman said as it upgraded the stock in a Nov. 4 research note. This could lead to "materially better margins" in 2022, the bank added. Goldman has put a 12-month price target of $194 on the stock, which closed at around $184 on Nov. 17. Goldman's analysts also upgraded CMC Materials to buy from neutral on Nov. 15, citing "improving prospects" in the company's electronic materials segment, particularly in China, as well as ongoing price hikes to offset inflation and an enterprise-wide cost optimization program. More than 80% of the company's revenues over the last 12 months were recurring in nature, which should strike a favorable chord with the market, the analysts opined. The bank's price target of $192 implies a potential upside of 32% on the stock's closing price of around $145 on Nov. 17. Taiwanese chipmaker Silergy rounds off Goldman's list of upgrades within the semiconductor sector. Following what the bank described as a "record" third quarter, Goldman is remaining "positive" on the company's "solid" long-term revenue and profitability growth outlook. Revenue and earnings are expected to grow 36% and 48% respectively till 2025, the analysts said as it put it up to a buy rating on Nov. 14. Shares of the company are up nearly 120% this year but Goldman sees further upside to the stock. It has ascribed a price target of 6,791 Taiwanese dollars ($244) on the stock, an implied upside of 28% from its closing price of 5,305 Taiwanese dollars on Nov. 18. DBS — Singapore's largest bank — was also upgraded to buy by Goldman last week. "We see DBS as best placed among the Singapore banks to benefit from the impending rise in Fed rates," the analysts said on Nov. 16. The Wall Street firm also highlighted DBS' potential to outperform its peers in this rate-hike cycle. It has put a price target of 40.4 Singapore dollars ($29.80) on the stock, an implied upside of 24% to the stock's closing price of 32.5 Singapore dollars on Nov. 18. Amid Goldman's positive outlook on airlines, low-cost carrier Allegiant Travel was upgraded to buy on Nov. 15. "Allegiant is one of the best positioned domestic airlines to see profitability recover to 2019 levels given its low cost, low utilization business model," Goldman said. The airline is expected to produce "one of the highest margins in the industry" over the medium term, the bank noted. Goldman has a price target of $250 on the stock, which closed at around $188 on Nov. 17 — an implied upside of 33%. Business services outsourcing firm Majorel was upgraded by Goldman to buy on Nov. 10, citing "secular tailwinds" around increasing digitalization post-Covid that will drive faster growth in customer care. "This should support double-digit underlying growth near term (ex-Covid contracts) and solid high-single-digit growth medium term," the analysts said. The company's "solid balance sheet" could also provide opportunities for value creation, they added. Goldman opined that the stock's recent correction has been overdone and see current levels as an "attractive entry point." The bank has a price target of 37.5 euros ($42.60) on the stock, which closed at 29 euros on Nov. 17 — an implied upside of 29%. Innoviz Technologies , a supplier of sensors and software for autonomous vehicles, was upgraded by Goldman on Nov. 16. The bank noted that the company is "among the leaders in a competitive industry" and has an "attractive long-term opportunity" to support applications including autonomous vehicles and smart cities. Goldman's price target of $9 represents a potential upside of 34% to the stock's closing price of $6.70 on Nov. 17.

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