Having some portfolio publicity to S&P 500 shares has actually paid off this yr. Over within the US, quite a lot of shares have soared in 2024.

In 2025, it’s extremely probably that the US inventory market will throw up extra alternatives for traders. With that in thoughts, right here’s a have a look at a S&P 500 inventory that Goldman Sachs believes might rise almost 60% subsequent yr.

A well known identify

The inventory I’m going to zoom in on right this moment is Uber Applied sciences (NYSE: UBER). It’s a serious world transportation and meals supply firm.

Its share price has been unstable in 2024. In October, it surged to $86, nevertheless, lately it has pulled again to $61 on the again of considerations about competitors from Tesla.

Goldman Sachs says Purchase

Goldman’s analysts see this weak point as a serious shopping for alternative.

It has a Purchase score on the inventory and a $96 price goal – roughly 57% above the present share price. It has additionally named it as a high web inventory choose for 2025, stating that it has a gorgeous risk-reward skew.

Goldman’s quantity crunchers count on Uber’s gross bookings and adjusted earnings earlier than curiosity, tax, depreciation, and amortisation (EBITDA) to develop at compound annual development charges (CAGRs) of 16% and 39%, respectively, from 2023 to 2026. In different phrases, they see important development within the years forward.

I’m shopping for

I like this name from Goldman Sachs. I’ve held Uber inventory for some time now and I purchased extra shares final week close to the $60 degree. There are a variety of causes I’m bullish.

One is that I see loads of development potential. This can be a firm that’s regularly increasing into new areas of journey (prepare rides, boat rides, automotive rental, bike/scooter rental, alcohol supply, and so forth) and I reckon it should do properly because the journey business grows. I see the corporate’s immediately recognisable identify as a serious aggressive benefit. When folks have to get from A to B, Uber is normally the primary identify that involves thoughts.

One other is that earnings are rising quickly. This yr, earnings per share (EPS) are projected to rise 98%. For 2025, analysts forecast EPS development of 28%. That’s a better degree than most ‘Magnificent 7’ firms are forecast to generate.

Then there’s the valuation. Presently, the price-to-earnings (P/E) ratio right here is just 26. I feel that’s a steal given the corporate’s model energy, market dominance, and development potential.

My view on the danger from Tesla

Now, there are dangers right here, in fact.

The large one which quite a lot of traders are involved about proper now’s competitors from Tesla. Many traders appear to consider that Tesla’s self-driving taxis (which in all probability gained’t be on the highway for a number of years) are going to disrupt Uber’s enterprise mannequin.

Personally, I feel this threat has been overblown. Trying forward, I consider that many automotive firms could have self-driving taxis, and I reckon Uber would be the platform that connects these firms with shoppers.

So, whereas Tesla’s targets do add some uncertainty, I proceed to see quite a lot of potential on this inventory and consider it’s value contemplating.