Goldman Sachs said this week that there is a slew of well-positioned stocks poised to soar even if market conditions deteriorate. Analysts said these companies have defensive qualities and are a safe haven for investors. CNBC Pro combed through Goldman’s research for attractive buying opportunities amid market uncertainty. These include Zoetis, Graphic Packaging, Novartis, Brink’s, UnitedHealth and Cintas. Graphic Packaging Holding “Unique defensive growth at a discount,” Goldman said recently of the commercial packaging materials company. Graphic Packaging shares are up nearly 17% this year, and analyst Adam Samuelson said the stock remains attractive and compelling. The company said in a note to clients after the company’s earnings report in late October that it was feeling even more optimistic. “We exit 3Q22 results with our positive view on GPK shares strengthened, following organic volume growth and better-than-expected gross margins…,” the company wrote. Samuelson said Graphic Packaging is underestimated by investors in that it differentiates itself from competitors with its strong combination of cash flow and compound earnings. The company also continues to achieve unprecedented productivity from its newest Michigan plant known as K2, which has allowed Graphic Packaging to improve backlogs and meet customer demand, according to Samuelson. “We believe this will increasingly set GPK apart from other fiber-based packaging companies that face a more challenging demand outlook from potential supply additions over the next 18 months,” a- he declared. Graphic Packaging is also benefiting from what Samuelson calls a “$12.5 billion market opportunity” as businesses and consumers switch from plastic to paper. “As a result, GPK’s medium-term outlook remains promising,” he added. Brink’s security and protection company is firing on all cylinders if the company’s recent earnings report is any indication, Goldman said. In late October, Brink’s reported solid third-quarter revenue growth, and analyst George Tong said the stock had more room to maneuver. In particular, customer demand has proven “resilient” for the company, and Brink’s cash management solutions division continues to take shares, according to the firm. “We believe BCO’s healthy growth outlook will be accompanied by a 100 basis point increase in annual EBITDA margin driven by efficient routing, facilities and technology, augmented by a new restructuring plan worldwide,” Tong added. Management continues to pull all the right levers, according to the analyst. This includes Brink’s recent acquisition of ATM networking company NoteMachine, which Tong says has significantly improved the company’s technology portfolio. “We believe Brink’s is well positioned to maintain attractive organic revenue growth, driven by both price and volume increases, despite the current macroeconomic uncertainty, following Q3 results,” he wrote. . The shares are down 9.8% this year. UnitedHealth Goldman is also backing shares of insurance giant UnitedHealth after beating Wall Street estimates on its quarterly results and raising its forecast in mid-October. Analyst Nathan Rich said the stock is well positioned for the rest of 2022 and beyond. “UNH expects its 2023 EPS guidance range to capture consensus at the high end,” he wrote. Rich Siad’s management execution is “strong”, with plenty of levers to pull to protect against an uncertain macro. “The company noted that its 2023 outlook contains conservative assumptions for next year’s economic environment,” Rich said. UnitedHealth has a “broad and deep opportunity pipeline” and “deploying additional capital could be an additional tailwind through 2023 and beyond,” the company added. The shares are up 7% this year, but Rich said the stock is still very “attractive” with “fundamental momentum” on its side. Brink’s “We believe BCO’s healthy growth outlook will be accompanied by a 100 basis point annual increase in EBITDA margin driven by routing, facilities and technology efficiencies, augmented by a new global restructuring. … We believe Brink’s is well positioned to maintain attractive organic revenue growth driven by both price and volume increases, despite the current macroeconomic uncertainty, following Q3 results.” UnitedHealth “Unsurprising outlook stands out – attractive for 2023 on fundamental momentum and capital deployment option. … Accretion of change (1%) and strong execution in core business. … Company has noted that its 2023 outlook contains conservative assumptions for the economic environment next year…. The company has outlined a broad and deep pipeline of opportunities, and the additional capital deployment could be an additional tailwind up in 2023 and beyond Cintas “Healthy F1Q results, with attractive and resilient growth prospects for even rentals driven by pricing and the non-programmer market. … We believe CTAS is well positioned to generate attractive revenue growth given the large, unpenetrated non-programmer market for uniform rentals, as well as the structurally higher demand for uniform rentals. uniforms and ancillary services from the post-COVID healthcare vertical. Due to pricing power and efficiency, operating margins increase on a yearly basis despite input cost inflation. Novartis “Strong execution in the third quarter in an attractive valuation framework. … We continue to believe that Novartis is well positioned to deliver strong medium-term operational execution for the Innovative Medicines (IM) business, with multiple launches of ongoing products and a late-stage pipeline option complementing top-line growth, including a potential mid-read for the NATALEE study in 2022. … We see this all in the context of an attractive valuation, with Novartis is trading at around 12x 2023E P/E.” Graphic Packaging Holdings “Unique defensive growth at a discount. … We come back from 3Q22 results with our positive view on GPK shares strengthened, following better than expected organic volume growth and gross margins. … We believe that this will increasingly set GPK apart from other fiber-based packaging companies that face a more challenging demand outlook over potential supply additions over the next 18 months….As a result , GPK’s medium-term outlook remains bright as the company continues to add value to the business by focusing incremental carton conversions on the $12.5 billion market opportunity for focused growth. sustainability from plastic to paper.” Zoetis “ZTS underperformed on its lack of revenue/EPS in Q3 vs. FactSet consensus and 2022 guide on sustainability. supply chain headwinds for several key products. Supply issues were primarily related to capacity and input supply, and management said these issues, particularly capacity, are resolved with the company working on back orders. … We think the stock remains attractive despite this additional short-term uncertainty, trading near its all-time low on our revised estimates.
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