Goldman Sachs’s top electric vehicle plays for 2023
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December 15, 2022
Business
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As investors become increasingly focused on the shift to electric vehicles, Goldman Sachs has a list of stocks aligning with automotive technology trends. Analyst Mark Delaney said he will continue to be “selective” with auto equipment maker names as price and mix will both be headwinds. He also said high interest rates could hurt early stage companies with negative free cash flow when trying to raise capital. “The bottom line is that we continue to believe it will be important for investors to not only navigate choppy cyclical/macro dynamics but also own the auto tech enablers,” said Delaney in a Tuesday note to clients. With this in mind, Delaney laid out his top picks for the industry, ranging from electric vehicle makers to component suppliers. All stocks included have buy ratings. Here’s some of his list: In addition to naming Tesla a top pick among automakers, he reiterated the company as a buy. But softer anticipated supply and demand prompted Delaney to lower the price target to $235 from $305. The new price target implies an upside of 49.9% over Wednesday’s close. The other automaker on the list was General Motors , which Delaney expects to see a smaller upside of 9.5% compared with where it closed Wednesday. The stock has taken less of a hit than Tesla this year, dropping 34.6%, which is better than Tesla’s 55.5% tumble. GM said in November it expects profits from electric vehicles to be around equal to gas vehicles by 2025 , which would put the legacy automaker multiple years ahead of its previously set schedule. Mobileye, which focuses on self-driving technology, debuted in October after getting spun out from Intel . The stock has been well liked since its debut, with 80% of analysts rating it a buy, according to FactSet. Delaney’s price target of $37 implies an upside of 4.4% from Wednesday’s close. Within companies that supply parts or systems directly to carmakers, one of Delaney’s favorite stocks is Aptiv . His price target of $121 presents an upside of 25.3% over where it closed Wednesday. But not everyone is as bullish. Last month, Morgan Stanley downgraded the stock to equal weight from overweight due to impacts from a slower rollout of electric vehicles. — CNBC’s Michael Bloom contributed to this report.
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