Goldman Sachs' Tactical Trades: Uncovering Undervalued Gems in the Earnings Crosshairs

The "Year of the Stock Picker" thesis from Goldman Sachs has never felt more relevant. As macroeconomic volatility and sector rotation dominate headlines, the bar for outperformance is shifting decisively toward individual equity selection. This earnings season, Goldman's Top 25 Tactical Trades list offers a roadmap for investors to capitalize on mispriced expectations—and three names stand out as prime candidates for asymmetric upside: Boeing (BA), Walmart (WMT), and a wildcard in the data analytics space.

Boeing (BA): Flying Against the Wind, With Tailwinds Ahead

Boeing's inclusion in Goldman's tactical list is a masterclass in contrarian value hunting. Despite a 20% year-to-date gain, the stock trades at a 25% discount to Goldman's $192.21 price target, fueled by underappreciated catalysts:
- Government Backing & Trade Leverage: Boeing has become a geopolitical asset, with its contracts weaponized in U.S. trade negotiations. This strategic importance creates a "too big to fail" premium, even after the Air India 787 crash recovery.
- EPS Catalysts: Analysts forecast a $2.64 EPS for 2025, up 18% from 2024, driven by defense contracts and commercial backlog execution. Institutional buying from State Street (STT) signals smart money accumulation.

Trade: Buy the dips below $170, targeting $190 by Q4.

Walmart (WMT): Tariff Headwinds Mask Hidden Value

Walmart's 7% YTD underperformance relative to Boeing and the S&P 500's 5% gain creates a compelling entry point. While tariff-driven cost pressures forced Q1 earnings silence, three factors suggest a bottoming process:
- Share Buybacks: Walmart's $20B buyback program is now 60% complete, reducing float and amplifying EPS growth.
- Price Sensitivity Advantage: Its 20% discount to Target (TGT) and 30% below its 5-year average P/E ratio reflects excessive pessimism about inflation.
- Q2 Revenue Surprise: Analysts expect a 4.5% net sales beat, with margins stabilizing as tariffs ease in key categories.

Trade: Accumulate below $140, targeting $155 by yearend.

Alteryx (AYX): A Missing Link in the Tactical List?

While Goldman's research explicitly excludes Alteryx from its top trades, its valuation gap demands attention. The data analytics firm trades at 10x forward earnings—half its 5-year average—despite:
- AI Integration: Its platform's adoption by Fortune 500 firms for real-time decision-making is underappreciated.
- Margin Expansion: Operating margins hit 22% in Q1, up from 18% in 2023, signaling scalability.

Trade: Consider a speculative position at $25, targeting $35 if AI adoption accelerates.

Why Equity Selection Trumps Index Funds Now

Goldman's "Year of the Stock Picker" isn't just a slogan—it's a necessity. The S&P 500's 5% YTD return masks a stark divergence: 40% of stocks are down year-to-date, while top performers like Boeing are up over 20%. Active managers are capitalizing on this dispersion:

The Edge in Volatility Mispricing: With the VIX at 13—its lowest since 2022—the market is pricing in serene stability. This creates a rare opportunity:
- Volatility Arbitrage: Sell S&P 500 straddles at 10% implied volatility, pocketing premiums as dispersion inevitably rises.
- Deep Value Plays: Focus on companies like Boeing and Walmart where macro fears have created buying opportunities.

Final Take: Play the Earnings Crossfire

This earnings season is a battlefield of expectations. Goldman's tactical list isn't just a shopping list—it's a playbook for identifying companies where Wall Street's consensus has misread the fundamentals. Boeing's geopolitical tailwinds, Walmart's valuation floor, and Alteryx's AI-driven turnaround represent asymmetric opportunities. Pair these with volatility trades to hedge against the market's complacency, and you'll be positioned to thrive in the "Year of the Stock Picker."

Investor action: Build a core/satellite portfolio with Boeing and Walmart as core positions, and use Alteryx as a satellite bet. Hedge with short volatility plays to capture the mispricing of uncertainty.

Note: Always conduct your own due diligence and consult with a financial advisor before making investment decisions.