There are several sneaky growth plays with fair prices heading into next year, according to a recent Goldman Sachs analysis. Goldman has a 2025 target for the S & P 500 of 6,500, betting on modest gains fueled by a U.S. economic expansion and greater profit margins driving earnings growth. Stocks that could see growth next year include this year’s laggards, which the firm said have a historical tendency to outperform in the subsequent first quarter of the following calendar year. Against this backdrop, analyst Deep Mehta gave a list of names considered to be “growth at a reasonable price,” or GARP, stocks. These are companies with strong growth potential that are considered to be trading at a generally attractive valuation, offering investors a middle ground between pure growth stocks and value stocks. “We look for stocks that are poised to grow into their multiple,” Mehta wrote in a recent note to clients. The firm screened for buy-rated laggards with at least 10% upside to price target, sales growth exceeding 10% and a price-earnings growth ratio below 1. A low PEG ratio suggests that a stock may be undervalued based on future expectations for earnings. Take a look at few of the firm’s GARP names below: Picks with strong growth expectations and reasonable valuations include clean energy names Fluence Energy and Enphase Energy , as well as Advanced Micro Devices and Teradyne . Fluence is having a rocky 2024, down 30%. Still, the name gets plenty of love on Wall Street, with 21 of 25 analysts rating it a buy or strong buy, according to LSEG. Consensus price targets suggest upside of nearly 54% from current levels. “We increasingly see FLNC as a winner,” said Jefferies analyst Julien Dumoulin-Smith in a recent report. Even as clean energy overall seems to be on shaky ground with the incoming Trump administration, the firm’s recent conversations with companies “suggest that renewables will be part of the solution to meet growing electricity demand as hyperscalers bring data centers online,” he wrote. AMD shares have suffered a nearly 15% loss this year. Bank of America recently downgraded AMD to neutral from buy, citing concerns about the company’s limited market share gain potential given greater competitive risks in the AI industry against “best-of-breed NVDA’s dominance.” Pinterest also made Goldman’s list. The online image-sharing platform has seen its stock plummet 16% this year. Nevertheless, Goldman analyst Eric Sheridan pointed to Pinterest’s “favorable risk-reward skew” in a Nov. 19 note. Pinterest had beat expectations on the top and bottom lines for the third quarter, but gave weak revenue guidance for the current quarterly period. MediaAlpha also made the screen.
Goldman’s growth picks for 2025 trading at a reasonable price