Goldman cites Microsoft, Starbucks and others for profit margins


Coffee, computer chip and metals companies all feature in a list of 29 “undervalued” stocks released by Goldman Sachs on Friday.

Here’s Goldman’s commentary on some of the buy-listed stocks he says aren’t getting their due.

· “Alcoa (AA) – Get Alcoa Corporation report: Significant leverage on a positive aluminum price outlook…should result in increased earnings and free cash flow generation allowing for deleveraging and capital allocation flexibility to seek the yield of shareholders.

· Advanced micro-systems (AMD) – Get Advanced Micro Devices, Inc.: Market share gains in client and server core processing segments, augmented by gross margin expansion and operating expense leverage, are expected to drive positive EPS revisions in the short to medium term .

· Microsoft (MSFT) – Get the Microsoft Corporation report: A strong presence across all layers of the cloud stack amid accelerating digital transformation spending is expected to drive predictable double-digit revenue growth and margin expansion. Recently announced price increases should help offset potential margin headwinds. …

· Starbucks (SBUX) – Get the Starbucks Corporation report: Tailwinds from economic reopening in the U.S. and abroad, along with significant company size, market share gains and operational efficiencies should drive strong multi-year earnings capacity. Management recently noted that cost of goods sold is not expected to be a headwind in fiscal 21/22 due to coffee buying. …”

Other names on the Goldman list include:

Applied materials (AMAT) – Get Applied Materials, Inc.Communications Charter (CHTR) – Get the Class A report from Charter Communications, Inc.Chemours (CC) – Get the Chemours Co report.Cheniere Energy (LNG) – Get the report from Cheniere Energy, Inc.Conoco Phillips (COP) – Get the ConocoPhillips reportDeere (OF) – Get the Deere & Company reportDiamondback Energy (CROC) – Get the report from Diamondback Energy, Inc.EQT (EQT) – Get the report from EQT CorporationExxon Mobil (XOM) – Get Exxon Mobil Corporation reportFirst Quantum Minerals FM.TO, Freeport-McMoRan (FCX) – Get the Freeport-McMoRan, Inc. report.Hasbro (AT) – Get the report from Hasbro, Inc.Herc Holdings (IRH) – Get the report from Herc Holdings, Inc.,

In addition, he called Johnson Controls International (JCI) – Get Johnson Controls International plc reportOvintiv (VOV) – Get the Ovintiv Inc reportPDC Energy (PDCE) – Get the report from PDC Energy, (RCMP) – Get, inc. ReportSherwin-Williams (SHW) – Get Sherwin-Williams company reportSuncor Energy (SU) – Get the report from Suncor Energy Inc.Trimble (TRMB) – Get the Trimble Inc. reportUnited Rentals (URI) – Get the report from United Rentals, Inc.Universal display (OLED) – Get the Universal Display Corporation reportwaste connections (WCN) – Get the report from Waste Connections, Inc.wing stop (WING) – Get the Wingstop, Inc. report. and Wyndham Hotels & Resorts (W.H.) – Get the Wyndham Hotels & Resorts, Inc. report.., AMD and Microsoft have stakes in Jim Cramer’s Member Club Action Alerts PLUS.


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