As the latest corporate earnings season unfolds, Goldman Sachs analysts are challenging the prevailing low-volatility market outlook by highlighting select equities poised for significant upside potential. This strategic focus targets companies whose current market valuations or conservative consensus estimates may not fully capture their underlying operational improvements and growth trajectories, thus presenting compelling opportunities for outperformance as their financial results are disclosed.
- Goldman Sachs analysts have identified specific equities with significant upside potential, diverging from current low-volatility forecasts.
- Permian Resources (PR) is projected for an additional 13% upside, with its critical earnings report anticipated on August 6.
- State Street (STT) is considered a strong play in financial services, with expectations for positive estimate revisions post-earnings.
- GE HealthCare (GEHC) is poised to exceed analyst estimates, driven by market recovery and new product launches, reporting earnings on July 30.
- The selected companies demonstrate operational improvements and growth trajectories that analysts believe are currently undervalued by the market.
Key Picks for Outperformance in Earnings Season
Permian Resources (PR): Energy Sector Catalyst
Among the identified opportunities is Permian Resources (PR), an energy sector participant that has already demonstrated robust market performance. The company’s shares have surged over 28% in the past three months, significantly outperforming the S&P 500. Goldman analyst Neil Mehta projects an additional 13% upside for PR, attributing this potential to the company’s rigorous cost optimization efforts, strategic merger benefits, and the efficiency gains derived from its Midland-based operations. Notably, the firm’s success in reducing drilling costs provides a competitive edge within the volatile energy landscape. The upcoming August 6 earnings report is anticipated as a key catalyst that could validate these operational advancements and further boost investor confidence, particularly given its direct exposure to dynamic oil and natural gas markets.
State Street (STT) and GE HealthCare (GEHC): Driving Momentum in Financials and Healthcare
In the financial services sector, State Street (STT) emerges as another compelling investment. The company has seen its shares appreciate by 38% over the last three months, with analyst Alexander Blostein noting its risk-reward profile as particularly attractive among trust banks. Expectations are high for a positive revision of estimates following its earnings release, driven by improved fee income, stable net interest income, and disciplined expense management. These factors are crucial for maintaining profitability in a challenging economic environment.
Concurrently, GE HealthCare (GEHC) is positioned to exceed analyst estimates within the healthcare domain. Its shares have climbed over 19% in the last quarter, with Goldman analyst David Roman suggesting that the company’s guided 2% growth rate may be conservative. This optimism is fueled by a robust boom in U.S. medical imaging, a recovering market in China, and the strategic launch of its diagnostic drug, Flyrcardo. With a market capitalization of approximately $35 billion, GE HealthCare’s July 30 earnings report is expected to capitalize on a market increasingly receptive to companies that blend strong fundamental performance with clear operational momentum.
Michael Carter holds a BA in Economics from the University of Chicago and is a CFA charterholder. With over a decade of experience at top financial publications, he specializes in equity markets, mergers & acquisitions, and macroeconomic trends, delivering clear, data-driven insights that help readers navigate complex market movements.