Big bank Goldman Sachs (NYSE:GS) has a major hand in the electric vehicle segment, having backed brands like Northvolt and Lordstown Motors. Goldman's latest top EV stock picks show their faith in the sector's long-term potential.
So which brands are a buy for analysts like Sharmini Chetwode under the Goldman name?
Goldman Sachs picks Tesla as a buy — no surprise there
Tesla (NASDAQ:TSLA) is about as buzzy as it gets in the stock market. Not only is the company a household name, but founder and CEO Elon Musk is a major market influencer via his Twitter. YTD, Tesla stock has actually sunk 4.8 percent. However, this dip basically creates an on-sale stock that has soared 571.82 percent in the past 12 months.
Specifically, Chetwode and other analysts touted Tesla for its strong growth potential (as well as proven growth). Tesla is also currently on Goldman's out-of-consensus list, which means it's rated above the majority of stocks on Wall Street.
Volkswagen and Astra are buys for Goldman Sachs
Goldman also rated Volkswagen (OTC:VWAGY) as a buy. According to analysts, "We continue to view VW as a leader in electric vehicles." VW is up 81.82 percent YTD and maintains a strong, impressive long-term streak.
VW has a hand in battery electric vehicles (BEVs, as opposed to plug-in hybrids and hybrids) which means they're going all in on the segment. They're focusing on vehicles with a long range and short charging time. Goldman seems to like this ambition.
Astra (OTC:PTAIF) is another buy-rated stock. YTD returns are down 14.6 percent, but growth is likely to be on the horizon.
Based in Indonesia, Goldman says Astra is heeding the charge in their home country. The company is also backed by Toyota and Daihatsu, which is a good sign for stability.
Other EV brands boosted by Goldman Sachs
A Chinese company called Sanhua Intelligent Controls (SHE:002050) focuses on a niche area within the EV sector. Specifically, they target heating, ventilation and air conditioning. They have a large portion of the market on lock, providing thermal management valves and pumps for new EVs. Goldman envisions long-term growth potential for this dominant company.
Meanwhile, Samsung SDI (KRX:006400) makes EV batteries. Goldman reports the company's strength based on a global increase in EV sales, and they predict long-term forecasts to remain consistent.
Allison Transmission (NYSE:ALSN) is a domestic company that manufactures automatic transmissions for all types of vehicles. They've expanded into the EV market by building electric and hybrid propulsion systems. Goldman analysts see major potential in this expanding business from the perspective of a value stock.
Goldman's way of catering to ESG
3) ESG investing is still being treated as a “side” investing strategy so some of the largest ESG investors also happen to be the largest traditional investors. So they basically get to eat their cake and have it too— Aminat M. (@aminattm) April 4, 2021
Environmental, social, and governance (ESG) stocks are all the rage—and not just because they're trendy. In terms of climate change, environmentally responsible companies are a necessity. Forecasts from analysts like Chetwode show that EV stocks have a long way to go, and investors want to be a part of that growth.