Goldman Sachs said investors who risk holding on to certain unpopular stocks could see outperformance in the future. Investors may make the most money by investing in contrarian ideas and against the crowd. In fact, Warren Buffett said in a 2008 New York Times op-ed, “Be fearful when others are greedy and be greedy when others are fearful.” In a report on Monday, Goldman Sachs released a Series of contrarian buying ideas. The basket is made up of Buy-rated stocks, where company analyst ratings are at odds with the rest of Wall Street. While these stocks may not be loved by most analysts, they could also provide investors with a windfall. “These names appear to be underappreciated by the market and could generate alpha for investors with opposing views,” Goldman Sachs Vice President Deep Mehta wrote. “For each name below, GS predicts 2024 Forecasts for 2020 are all over 2% above consensus.” Here are some of Goldman Sachs’ differential buy names. One stock the company has specifically picked is Instacart, which is up nearly 50% this year. The investment bank sees room for 40% upside from the delivery company’s price target. About half of the analysts covering Instacart currently have buy ratings, according to LSEG. Last month, Citi raised its price target to $42 per share from $36, citing the company’s competitive advantage as a catalyst. In February, Instacart reported that it would lay off about 250 employees, or 7% of its workforce, as part of a restructuring. Capital One also made Goldman’s list, with about 30% of analysts giving the stock a buy or strong buy rating, according to LSEG. The financial services company’s shares are up 7% this year, but Goldman Sachs believes they could rise as much as 24%. Clothing retailer Gap’s stock price has risen 10% this year, but Goldman Sachs still believes there is room for 15% growth in the future. About a quarter of analysts have a buy or strong buy rating on the stock, according to the London Stock Exchange. Gap surged earlier this month after the company reported better-than-expected fiscal fourth-quarter earnings and revenue. Last month, J.P. Morgan raised its rating on the company to “neutral,” citing Gap’s strength in inventory, marketing and merchandise variety. Goldman Sachs expects Petco’s future upside potential to be as high as 88%. About a third of Wall Street analysts have a buy or strong buy rating on the pet retailer, according to data from London Stock Exchange Group (LSEG). Petco is down 19% so far in 2024. The company’s shares edged lower on Wednesday despite beating fourth-quarter revenue estimates after the company announced the resignation of Chief Executive Ron Coughlin.
