Goldman Sachs today presented the May edition of its “US Conviction List - Directors’ Cut” regular report, which is focused on the top Buy-rated stocks.
Specifically, the Wall Street giant added Kinder Morgan (NYSE:KMI) and Guidewire Software (NYSE:GWRE), while J.B. Hunt Transport Services Inc (NASDAQ:JBHT) and PPG Industries Inc (NYSE:PPG) made way.
Analyst John Mackay believes that KMI has reached an inflection point “especially in its core business, as re-contracting headwinds dissipate and operating leverage to improving gas demand materializes, with additional support from better overall execution,” Goldman said in the note.
“Mackay also looks for growth from KMI’s project backlog and improving project returns, particularly as KMI should benefit from growing power demand in the US, driven by AI adoption and datacenter growth,” it added.
For GWRE, analyst Kevin Kumar views the US software company as uniquely positioned for long-term IT investment by P&C insurers, Guidewire’s main clients.
Like many peers, Guidewire is shifting from on-premise to cloud-based applications, enhancing revenue predictability, scalability, and pricing power, a transition that is expected to benefit from insurers' tech stack upgrades.
“And Kumar believes that GWRE is reaching a tipping point in terms of product capabilities and maturity, which coupled with healthy macro tailwinds within the P&C insurance industry should continue to drive strong results,” analysts said.