Uncertainty has been the name of the game in 2022. A combination of negative macro developments – a slowing global economy, the geopolitical ramifications following Russia’s invasion of Ukraine and – possibly most of all – the prospect of the Fed seriously tightening its monetary policy to combat inflation – have all been weighing heavily on investors’ minds.

That doesn’t necessarily mean there aren’t good opportunities to take advantage of right now. The analysts at banking giant Goldman Sachs have pinpointed two names which have recently outperformed market expectations and which they believe are set to surge ahead even in the face of the unhospitable current environment – by the order of 40% or more.

We ran both tickers through the TipRanks database to see what the rest of the Street has in mind for the pair. Let’s take a look at the findings.

Pure Storage (PSTG)

The first stock on Goldman Sachs’ radar is Pure Storage, a provider of various data storage products. The company’s flash-based solutions come both in software and hardware form and are used in data centers. The company began by using third-party solid-state drives (SSDs) for its storage solutions. However, its own proprietary hardware soon replaced those SSDs and the company also brought into the market integrated deduplication, compression, and artificial intelligence software to help businesses conserve space and set up their devices properly.

Pure Storage has formed a strong partnership with Meta, having assisted in the development of the initial version of its AI research infrastructure in 2017. Since then, the pair have continued working together and earlier this year the two began a collaboration on Meta’s new AI Research SuperCluster (RSC), which Meta claims will be the fastest AI supercomputer in the world.

Like most tech stocks, Pure has found 2022 hard going but that hasn’t stopped the company from delivering the goods in its latest quarterly report.

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In F1Q23, revenue rose by 50.3% year-over-year to reach $620.4 million, handily beating the $521.74 million Wall Street expected. Similarly, on the bottom-line, adj. EPS of $0.25 came in well above the $0.05 consensus estimate. The company delivered on the outlook too, expecting revenue of roughly $635 Million in FQ2 vs. consensus at $604.64 million. For the full year, sales are anticipated to reach $2.66 Billion. Analysts had that figure at $2.59 billion.

Along with the company’s exemplary execution, it is the Meta collab which informs Goldman analyst Rod Hall’s bullish thesis.

“We see this Meta opportunity as a strong revenue tailwind for Pure looking forward in FY’23. We also see ongoing strong results as an indication that Pure’s products are gaining an increasing following among enterprise and service provider customers,” the analyst opined. “At this point we see Pure’s supply management as superior to most other companies in our coverage in the IT hardware area.”

The bullish comments underpin Hall’s Buy rating while his $50 price target makes room for one-year gains of 79%. (To watch Hall’s track record, click here)

Overall, PSTG has attracted a total of 10 analyst reviews recently, including 7 Buys and 3 Holds for a Moderate Buy consensus rating from the Street. PSTG shares are priced at $27.90 and have an average price target of $38, giving the stock a 36% upside on the one-year time frame. (See PSTG stock forecast on TipRanks)

Lululemon Athletica (LULU)

From tech we will pivot over to an entirely different sector. Everyone knows Lululemon – the athleisure specialist. The company got its beginnings in 1998 as a yoga pants and other yoga clothing retailer, but has since evolved to include athletic wear, lifestyle clothes, personal care products and all manner of accessories. Lululemon now has over 570 stores spread across the globe while it has also built a strong online presence. In apparel, the company has been rated as the world’s fourth most valuable brand.

Lululemon was one of the Covid era stars as people stayed at home and slipped into more comfortable wear, while the company even managed to overcome the closure of physical stores by shifting sales online. While not immune to the market’s overall downturn, Lululemon appears to have managed well in the face of new challenges, namely the supply chain issues which have impacted so many in recent times. This was evident in the company’s latest earnings report – for F1Q22.

Lululemon generated revenue of $1.6 billion, a 32% increase on the same period a year ago, while diluted EPS hit $1.48. Both were above the analysts’ forecast of $1.55 billion and $1.43, respectively. There was more good news for the outlook. For FQ2, Lululemon sees revenue coming in the range between $1.750 billion to $1.775 billion, above consensus of $1.73 billion. And the company also raised its revenue and EPS outlook for the full year.

Surveying the print, Goldman Sachs analyst Brooke Roach is thoroughly impressed. She writes, “We come away from the quarter with increased conviction in LULU’s strong brand engine fueled by innovation. While industry cost pressures are weighing on margin flow-through (where airfreight pressures have lowered full year margin outlook modestly), we continue to see this idiosyncratic growth story as well-positioned to navigate a tough backdrop as the company has meaningful pricing power, strong consumer connection, and less exposure to inflating AUCs (average unit cost).”

Accordingly, Roach rates the stock a Buy, backed by a $456 price target. Going by this target, shares are expected to climb 48% higher over the one-year timeframe. (To watch Roach’s track record, click here)

Looking at the consensus breakdown, the majority of analysts are bullish on LULU’s prospects, too; 19 Buys and 7 Holds add up to a Moderate Buy consensus rating. The average price target of $409.69 suggests upside of ~34% in the year ahead. (See Lululemon stock forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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