Investors who take the risk of owning certain unloved stocks could see outperformance down the road, according to Goldman Sachs. Investors may see their biggest gains by investing in contrarian ideas and going against the crowd. Indeed, in a 2008 op-ed in The New York Times , Warren Buffett said, “Be fearful when others are greedy, and greedy when others are fearful.” In a Monday note, Goldman released a list of its contrarian buy ideas. This basket of stocks consists of buy-rated names on which the firm’s analysts are out of line with the rest of Wall Street. While these stocks may be unloved by most analysts, they could bring windfalls to their investors. “These names appear underappreciated by the market and could generate alpha for investors with a contrarian view,” Goldman vice president Deep Mehta wrote. “For each of the below names, GS estimates are 2%+ above consensus in 2024E.” Here are a few of Goldman’s differentiated buy names. One stock that the firm singled out was Instacart, up nearly 50% this year. The investment bank sees 40% upside to its price target for the delivery firm. Roughly half of analysts covering Instacart have currently assigned it a buy rating, per LSEG, formerly known as Refinitiv. Last month, Citi cited the firm’s competitive advantages as a catalyst to hike its price target to $42 per share from $36. In February, Instacart reported that as part of a restructuring, it would lay off about 250 employees , or 7% of its workforce. Capital One also made Goldman’s list, with about 30% of analysts assigning the stock a buy or strong buy rating, according to LSEG. Shares of the financial services firm are up 7% this year, but Goldman thinks they could soar as much as 24%. Clothing retailer Gap has popped 10% this year, but Goldman still sees room for 15% upside ahead. About a quarter of analysts covering the stock have given it a buy or strong buy rating, according to LSEG. Gap popped earlier this month after the company reported a fiscal fourth-quarter earnings and revenue beat . Last month, JPMorgan upgraded the company to neutral , noting Gap’s strength in inventory, marketing and merchandise assortments. Goldman sees a whopping 88% upside ahead for Petco . The pet retailer has buy or strong buy ratings from about one-third of Wall Street analysts covering the name, per LSEG. Petco is down 19% so far in 2024. Shares inched lower on Wednesday despite a fourth-quarter revenue beat after the company announced CEO Ron Coughlin is stepping down .
This story originally appeared on CNBC
