Goldman Sachs on Monday updated its popular “US Convictions – Manager Cut List”, adding five stocks to its selection of buy-rated stocks from its US coverage.
The five names added in the June update include Edwards Lifesciences Corp (NYSE:), Enphase Energy (NASDAQ:), Enphase Energy (NASDAQ:), Sempra Energy (NYSE:), Teradine (NASDAQ:), and Brixmoor Estate (NYSE:) Group.
For Edwards Lifesciences, the company's upside is based on the company's successful transformation of its product cycle and potential market expansion for its transcatheter aortic valve replacement (TAVR) product line. Growth is expected to come from treating a broader patient population, including younger asymptomatic patients.
“Look for new products and an expanded TAM to drive accelerated overall growth in 2025 and position sales and EPS estimates 2-8% above the Factset consensus in 2025-2027E,” the analysts wrote in the note.
Enphase Energy's listing comes as Goldman expects a rebound in revenue, especially from the important California market. The company indicates that the previous inventory unloading cycle, affected by regulation, is coming to an end.
“In addition, the company's still nascent home battery segment is poised to benefit from changing residential electricity economics that make storing electricity at home more profitable than selling it back to the grid at certain times of the day,” Goldman's note said.
Meanwhile, the company's analysts are also optimistic about Sempra Energy's growth prospects, as its Oncor facilities in Texas are expected to benefit from business, infrastructure and population expansion in the state.
Analysts also highlight the company's capital expenditure growth outlook and strong LNG pipeline, which is expected to support expansion of its regulated facilities.
Finally, automatic test equipment (ATE) designer Teradyne has made its way onto Goldman's conviction list as analysts expect to see an inflection point in sales, mainly due to depleted inventory levels and an upcoming positive earnings cycle.
The company also points to potential earnings tailwinds from a rebound in sales to a key customer, new product initiatives, “and a cyclical rebound in its robotics business (10% of sales) should also provide earnings tailwinds,” analysts noted.
While these five stocks were added, First Solar (NASDAQ:), Southern Company (NYSE:), Goal Corporation (NYSE:) and Simon Property Group (NYSE:) names were removed as part of the June update.
