Goldman adds ConocoPhillips and Loar to high-conviction list

The US war with Iran has rattled markets and pushed oil higher, prompting Goldman Sachs to revise its list of high-conviction US stock picks. The bank added ConocoPhillips and Loar Holdings as investors rotate toward "old economy" or "HALO" (heavy asset, low obsolescence) assets.

"Investors are finally giving more value to old world capital intensive businesses that is now extending beyond just those investing in hard data center assets to other slices of the supply chain and the economy," the analysts wrote. Goldman highlighted ConocoPhillips as an energy name nearing a positive inflection point after shares climbed amid rising energy-supply worries.

Neil Mehta said the company is "on the cusp of a positive free cash flow inflection over the next three years as it transitions from a long period of heavy project investment to boost its oil reserves into a new period of 'investment harvesting' characterized by major projects coming online and capex diminishing." The bank also sees roughly 10% upside from current levels for the stock.

United States

goldman sachs, conocophillips, loar holdings, oil prices, energy sector, halo, old economy, cash flow, capex, stock upside