For investors wanting to buy growth stocks but are worried about high valuations, Goldman Sachs found a slew of growers with fair prices. The Wall Street firm expects growth to outperform in 2024 as its baseline forecast suggests that economic improvement will remain modest and rates won’t rise much further. Growth oriented stocks would also be big winners if interest rates surprise to the downside due to a softer economy, Goldman said. “We offer a screen of Growth at a Reasonable Price (‘GARP’) stocks for investors looking to add length to Growth but who are wary of valuations,” David Kostin, Goldman’s head of U.S. equity strategy, said in a note to clients. Goldman screened S & P 500 constituents for stocks that rank in the top 20% of their sectors based on growth but do not rank in either the top 40% or bottom 20% of their sectors on value. The median stock in the GARP screen is expected to grow earnings in 2024 by 13%, compared to 8% for the median S & P 500 stock. The stocks trade at a forward price-to-earnings ratio of about 16 times, compared to 17 times for the median S & P 500 stock. These stocks with high growth and reasonable valuations include a number of travel names — Live Nation Entertainment , Wynn Resorts , Booking Holdings and Las Vegas Sands. Big-box retailer Target is also on the list. The retail stock got a boost recently after the company posted a big earnings beat for its fiscal third quarter. Shares of Target are still down about 8% on the year, however. Other stocks in Goldman’s GARP screen include Cincinnati Financial , Everest Group , General Electric and First Solar . — CNBC’s Michael Bloom contributed reporting.
