Goldman Sachs has listed the stocks on the S & P 500 that have the highest upside to its own price targets — including 9 the bank says have potential upside of over 60%. The S & P 500 ended the first quarter down 5%, despite bouncing back strongly after falling into correction territory. The decline was led by stocks in IT and communication services, Goldman noted, while energy and utilities stocks fared best. "Uncertainty surrounding monetary policy, elevated inflation, and impacts stemming from Russia's invasion of Ukraine has weighed on the index since the start of the year," Goldman Sachs' Chief U.S. Equity Strategist David Kostin said in a research note on Apr. 4. "Furthermore, slower domestic and global growth paired with higher commodity prices should continue to pose a risk to earnings and margins." The bank estimates the S & P 500 will finish the year at 4,700 points — around 5% higher than current levels — but noted that some stocks have the potential to significantly outperform. It listed the stocks on that S & P that have the highest upside to its own price targets, with Penn National Gaming coming in top. The casinos and racetracks operator has the most potential upside among the S & P stocks in Goldman's coverage, the bank said, with upside to its price target of 81.5% over the coming 12 months. Read more Barclays cuts S & P 500 target to 4500, warns of a consumer spending reversal that will dent earnings A rebound in small caps could spark even more gains for the S & P 500, chart analyst says Bath & Body Works , Fortune Brands Home & Security , Las Vegas Sands also have significant upside to their price targets, Goldman said, with potential upside of over 70%. Cloud software giant Salesforce , water treatment firm Pentair , home appliances retailer Whirlpool , home construction company D R Horton and Boeing also made the list, with potential upside to price targets of more than 60% over the next 12 months, according to the bank. The above stocks are all buy-rated by Goldman analysts, except for D R Horton which is rated neutral. EPS growth Goldman also forecast earnings-per-share growth of 5% for the S & P 500. EPS is an important metric used by traders to gauge the value of a stock or index. Goldman's list of stocks where its EPS estimates are higher than consensus includes a raft of energy stocks such as Chevron , ConocoPhillips , Hess , Pioneer Natural Resources , Diamondback Energy , Devon Energy and Exxon Mobil . Occidental Petroleum also makes the bank's list, with Goldman's EPS estimate 74.8% above the average estimate of all equity analysts that cover the stock. The energy sector has enjoyed a renaissance of late on the back of soaring oil and gas prices amid the prospect of a Covid-19 reopening and supply disruptions from the conflict in Ukraine.
A Goldman Sachs Group Inc. logo hangs on the floor of the New York Stock Exchange in New York, U.S., on Wednesday, May 19, 2010.
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