Tesla TSLA Enters Goldman Sachs List of Stocks for Soft Landing

Tesla entered the Goldman Sachs list of stocks for a soft landing. The list includes 46 companies that the firm believes should benefit from it.

With inflation and job growth starting to ease, some investors and economists say that the Federal Reserve will be able to engineer a soft landing, according to The Street. This would mean that raising the interest rate suppresses inflation without destroying economic growth. So Goldman Sachs has compiled a list of 46 stocks that should benefit from a soft landing and Tesla made the list.

The list includes profitable Russell 3000 companies in the cyclical industry group with a market capitalization of over $5 billion. The chosen stocks trade at a forward price-earnings multiple below their 10-year median and have an Altman z-score greater than the Russell 3000 median.

The Altman Z-Score is a formula for determining if a company is headed for bankruptcy. The higher the score, the lower the probability of bankruptcy.

Goldman's list does not include energy and other companies that have outperformed their industry group since 2021. The list contains many capital goods and diversified financial stocks. The median market cap for stocks on the list is $10 billion. The median stock trades at a forward price-earnings multiple of 12, versus a 10-year median of 17. The median stock has underperformed its industry group by 15 percentage points since 2021.

Here are 10 stocks on the list, grouped by industry.

• Tesla
• Capital One Financial
• Truist Financial
• CME
• Carlyle Group
• 3M
• Masco
• Otis Worldwide
• Parker Hannifin
• Advanced Micro Devices

Morningstar analyst Seth Goldstein assigns Tesla a narrow moat (durable competitive advantage). He puts fair value for the stock at $220, 80% above recent trades at $122. He cut his valuation from $250 after Tesla reported lower-than-expected fourth-quarter deliveries, but is confident the company will grow.

“However, fourth-quarter deliveries still grew 31% year over year, which we view as a sign that demand is still present, and the company can still grow,” Goldstein wrote in a commentary. “Accordingly, we forecast over 1.6 million vehicles delivered in 2023, a 24% growth rate.” The analyst added that “our long-term assumptions remain intact,” he said. “We forecast over 5 million vehicles [in annual deliveries] by 2031, as Tesla launches the Cybertruck and new affordable vehicle platform.”

© 2023, Eva Fox | Tesmanian. All rights reserved.

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This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Eva Fox, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

Eva Fox holds zero shares of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.