Goldman Sachs Lifts S&P 500 Price Target; Here Are 2 High-Upside Stocks to Play the Bounce

Year-to-date, the S&P 500 has delivered an impressive return of 14%. However, those gains are a bit deceiving as the bulk of the upside has been driven by only a few selected stocks, namely the tech Mega Caps (AAPL, MSFT, NVDA, META, AMZN). If we exclude those five stocks, the index has only advanced by 5%.

While one could argue that the market is due for a cooling down period after such a rally, Goldman Sachs Chief U.S. Equity Strategist David Kostin suggests otherwise, citing past evidence. “Prior episodes of sharply narrowing breadth have been followed by a ‘catch-up’ from a broader valuation re-rating,” Kostin explained.

As such, Kostin not only increased Goldman’s year-end price target for the S&P 500 from 4000 to 4500 (a 12.5% lift), but there’s also the prospect of stocks yet to reap the benefits of the rally closing the gap as the year progresses.

Against this backdrop, Goldman Sachs analysts have been seeking out those equities and have turned their focus to two that have plenty of upside, according to their calculations – in the order of 90%, or more. Running the tickers through the TipRanks database, it’s clear Goldman is not alone in thinking these stocks have plenty to offer investors; both are also rated as Strong Buys by the analyst consensus.

Rent the Runway (RENT)

Our first Goldman-backed stock is a disruptor in the fashion industry. Rent the Runway lives up to its moniker by accurately describing its activities, which involve offering clients the opportunity to rent high-end fashion items. This concept of temporary ownership allows customers to browse a diverse range of styles, sizes, and brands on the Rent the Runway website or mobile app. They can then choose items to rent for specific occasions or timeframes. The platform provides options for both one-time rentals and subscription plans. In line with the trends of 2023, the company utilizes AI algorithms and machine learning techniques to enhance various aspects of its business, including inventory management and personalization.

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