With the market in turmoil, Goldman Sachs is recommending stocks it sees as favorably positioned to perform in varying broader market circumstances. Wall Street kicked off October on a high note as the stock market rallied to begin the month. But that was juxtaposed against a dark September, when the major indexes slid as investors grew increasingly concerned about a potential recession while the Federal Reserve continued increasing interest rates in a bid to temper inflation. Regardless, Goldman Sachs vice president Deep Mehta and his team screened for stocks they believe can deliver across market environments. The bank looked at financial returns, cash returns on cash investments and debt-adjusted cash flow. Adobe is expected to increase revenues two to three times current levels over the next few years through subscriber growth and pricing adjustments that should bring double-digit top-line growth in that period. Goldman anticipates an upside of 96% as of Sept. 30. The software company announced it would acquire Figma , the design software maker, in a deal worth about $20 billion in cash and stock in mid September. Tobacco company Altria Group has particularly strong free cash flow and net price realization with no currency exchange risk, which offers stability as the dollar surges. Goldman also sees expanding gross margins and is confident in the company’s ability to hit per-share earnings targets with limited downside risk. It has an expected upside of 44%. Honeywell is also attractive to Goldman because of “a history of strong execution” that leaves it “well positioned given the longer-cycle nature of its portfolio.” The firm said the conglomerate has one of the best balance sheets of companies it covers. Honeywell could unlock future earnings by using some of its backlog of $29.5 billion to find new areas for growth, according to Goldman. It has has an upside of 30%. With an upside of 59%, payment service provider Visa also remains well-positioned because of its emphasis within the US It is expected to have per-share earnings growth in the high teens for the foreseeable future as electronic payments become increasingly ubiquitous and the company finds new areas for growth. Visa, along with competitors, has been facilitating billions of dollars in transactions linked to crypto platforms. —CNBC’s Michael Bloom contributed to this story.
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