Goldman Sachs is recommending investors buy the dip in five key stocks: Alibaba Group, Burlington Stores, Ulta Beauty, Aecom, and Viking Holdings. Analysts believe these companies are undervalued and poised for future growth despite current market concerns or temporary setbacks.
The bank’s analysts highlight specific strengths for each company, ranging from Alibaba’s AI and Cloud potential to Ulta’s market share gains and Viking’s differentiated cruise offerings.
Goldman Sachs' Top 5 Stock Picks: Buy the Dip Before It's Too Late
By Liz Napolitano
Goldman Sachs analysts have identified five compelling stocks that they believe present attractive buying opportunities on any dips. In a recent analysis, the investment bank highlighted companies that are considered too good to ignore, urging investors to consider adding them to their portfolios.
Key Stock Recommendations:
- Alibaba Group (BABA): Goldman Sachs maintains a 'Buy' rating, anticipating a significant earnings per share recovery driven by its Cloud business and a rebound in e-commerce profits.
- Burlington Stores (BURL): Despite a recent mixed earnings report and a year-to-date stock decline, Goldman sees strong potential due to margin execution, new store productivity, and operational levers.
- Ulta Beauty (ULTA): Analysts believe Ulta has been unfairly punished by the market and is well-positioned to gain market share in the competitive beauty industry, with potential for its guidance to be conservative.
- Aecom (ACM): Concerns about AI disruption and legacy construction projects have impacted Aecom's valuation, but Goldman Sachs suggests these headwinds are overblown and the current multiple is attractive.
- Viking Holdings (VIK): While acknowledging challenges like low river water levels impacting European cruises, Goldman Sachs believes Viking's differentiated geographic exposure and higher-income demographic will drive long-term growth and pricing power.
Analyst Insights:
Kate McShane, an analyst at Goldman Sachs, expressed optimism for Ulta Beauty, stating, "In our view, investors may be concerned that Ulta (and the overall industry) was more promotional y/y in 2Q, and the company's 2H guidance implies a sequential deceleration on the top line." However, she added, "That said, while the beauty space is highly competitive, we believe Ulta is well positioned to continue gaining share, and company guidance could prove conservative for the year..."
Regarding Burlington Stores, McShane noted, "While the company delivered strong margin execution and raised FY26 guidance on an underlying basis, 2Q comp growth of 2% and 3Q comp guidance fell short of investor expectations." Despite this, she believes, "Strong margin flow-through, robust new store productivity and multiple operational levers should continue to support earnings growth, in our view."
Lizzie Dove, another analyst at Goldman, remains a proponent of Viking Holdings, explaining, "In a world where there has been uncertainty around cruise and the consumer more generally, Lizzie Dove believes that VIK's differentiated geographic exposure and higher-income demographic should more than offset a choppier cruise environment." She anticipates that Viking will "continue to deliver best-in-class pricing growth and top of best-in-class capacity growth through 2H26 and into 2027."
For Aecom, the firm indicated that de-rating concerns are primarily linked to fears of AI disruption in the Engineering & Design industry and uncertainty surrounding legacy construction projects. Goldman Sachs asserts that the current lower multiple is largely attributable to these construction management headwinds.
Market Context:
The recommendations come at a time when the market is navigating various economic factors. Goldman Sachs' 'buy the dip' strategy suggests a belief in the underlying strength and future growth prospects of these selected companies, even amidst short-term market volatility or specific company challenges.
