If Goldman Sachs accurately predicts the future market, the overall stock market increase in the United States will be tightened due to concerns about the increase in the 10-year US Treasury bond yield, high stock market valuations, and the sustainability of the US government's high deficit, according to Peter Oppenheimer, a well-known strategist at Goldman Sachs.

In a research reports released by Goldman Sachs in May, the strategy team at Goldman Sachs predicted that from now on to the end of the year, it was unlikely that the S&P 500 index would continue to rise, due to the significant drop in the rate of interest rate cuts expected by the Federal Reserve, from an expected rate cut of 150 basis points earlier this year to only 25 basis points. Goldman Sachs reaffirmed the target forecast of 5200 points for the S&P 500 index by the end of the year, and pointed out that "the rate of return will remain roughly the same from now until the end of the year" unless the Federal Reserve lowers interest rates more aggressively than the market currently expects.

Goldman Sachs economists predict that the actual GDP growth rate in the United States this year will be around 3%; the Goldman Sachs stock strategy team predicts that the earnings growth rate for the S&P 500 index in 2024 will reach 8%, while emphasizing that the current valuation of the US stock market has reached historical highs.

"In our view, the faster the US Treasury bond yields rise, the greater the negative impact on US stocks," said Goldman Sachs strategist Peter Oppenheimer, adding that "this will be a speed ​​limit considering the stock market valuation."

However, although US stocks may switch to horizontal fluctuations or tend to adjust downward, there are still opportunities for progress. Oppenheimer pointed out that "diversification is an opportunity for investors in a smooth market environment."

Diversification and portfolio management is a more cautious investment strategy, and the "bottom-up" stock selection logic is more suitable for investors when the benchmark index faces upward pressure. Oppenheimer's colleagues in Goldman Sachs' stock analysis team are selecting stocks with stable growth potential using the "bottom-up" stock selection logic.

According to the TipRanks database, two stock recommendations recently given by Goldman Sachs analysts show that the views of Wall Street banks and Goldman Sachs are consistent - analysts unanimously rate these two hot stocks as "strong buy."

Jazz Pharmaceuticals (JAZZ.US)

For a biotechnology company, obtaining regulatory approval and launching a drug is like finding the Holy Grail - and Irish-based Jazz Pharmaceuticals has a large number of such approved products in the fields of neuroscience and oncology. These commercial drugs ensure Jazz Pharmaceuticals' strong fundamentals, even as the company continues to incur significant expenses related to extensive research projects for new drugs, while also maintaining stable quarterly profits.

From an investor's perspective, this biotechnology company offers a "win-win" situation in biotechnology, with both stable revenue and sales records, as well as promising clinical trial candidate drug potential.

Among the existing and approved drugs of the company, three drugs have been rated by the company as "key growth drivers" for the first quarter of this year. The total revenue of these three drugs increased by 12% year-on-year, and two of them are neuroscience products from Jazz Pharmaceuticals, while the third is a tumor drug. From lowest to highest growth, the three main sources of revenue are Epidiolex (a cannabis quinone used to treat epilepsy), with net product sales growing by 5% year-on-year; Xywav, a drug used to treat excessive daytime sleepiness, with net product sales growing by 14%; and Rylaze, a tumor drug used to treat acute lymphoblastic leukemia, with net product sales growing by about 20%.

Turning to the R&D pipeline, one of the company's candidate drugs, zanidatamab, is the subject of several clinical trials. These studies plan to use zanidatamab as a single therapy and combination therapy to treat multiple cancers. Among these studies, one study is a trial of zanidatamab in the treatment of HER2-positive biliary tract cancer. The company released positive data on the phase 2b clinical trial of zanidatamab for previously treated, unresectable, locally advanced or metastatic HER2-positive biliary tract cancer on June 1, showing that zanidatamab "performs a sustained and lasting anti-tumor response."

Just a few days before the data was released, Jazz Pharmaceuticals announced that the FDA had approved the BLA (biologics license application) priority review of zanidatamab for the indication of previously treated, unresectable, locally advanced or metastatic HER2-positive biliary tract cancer. The PDUFA review date is scheduled for November 29, 2024.

Furthermore, Jazz Pharmaceuticals gave a speech at the 38th Annual Meeting of the Associated Professional Sleep Societies in early June. These speeches highlighted the safety and efficacy of Xywav, the company's approved blockbuster drug to combat excessive daytime sleepiness.

For Goldman Sachs analyst Andrea Tan, part of the company's attractiveness lies in the high quality of its R&D pipeline. When discussing the stock, she wrote, "While there has been debate on the outlook for the sleep business (and to a degree, Epidiolex), we are positive on the emerging pipeline to support long-term performance growth... Continued investment in R&D and early-stage pipelines and business development (if Jazz leverages up to 5x 2024 EBITDA, its balance sheet capacity for incremental assets will be around $8 billion) will be sources of growth." Given that Jazz Pharmaceuticals' stock trades at a higher discount to the S&P 500 index than its five-year average, we believe the stock's current level is attractive."

Goldman Sachs analyst Andrea Tan gave a "buy" rating and a target price of up to $169, indicating strong potential for a 55% increase in the stock within a year.

Wall Street analysts' unanimous "strong buy" rating of Jazz Pharmaceuticals is based on 16 comments, including 13 "buy" ratings and 3 "hold" ratings, with an average target price of $180.86, even more optimistic than Goldman Sachs' view, indicating 66% potential upside from Monday's closing price of $108.99.

Ji Ke (ZK.US)

The next important stock on Goldman Sachs' supported stock list is the Geely partially owned electric car brand, ZK.US. ZK is a deluxe electric car brand that focuses on combining European automotive style and performance with the latest advanced manufacturing and production technologies. The company's models include Zeekr 001, a five-seat hatchback crossover, and Zeekr X, a luxury urban SUV. Additionally, the company has also released a 6-seat MPV Zeekr 009 and is developing a high-end luxury sedan. The company's cars are positioned as pure battery electric vehicles with high-end software and hardware applications to enhance the driving experience.

This year in May, ZK officially debuted on the US stock market and announced a strong quarterly performance report. Earlier this month, Zeekr announced delivery data for May 2024, showing strong year-on-year growth. In the first quarter of this year, ZK delivered a total of 33,059 vehicles, a year-on-year increase of 117%, achieving revenue of RMB 14.737 billion, a year-on-year increase of 71%; the gross margin of the whole vehicle reached 14%, an increase of 3.9 percentage points year on year.

From January to May, ZK delivered a total of 67,764 vehicles, a year-on-year increase of 112%, ranking first among Chinese pure electric vehicle brands with sales of over 200,000 in 2024. Among them, 18,616 were delivered in May, a year-on-year increase of 115%, marking a new monthly delivery record.

This Chinese electric car maker has caught the attention of Goldman Sachs electric vehicle industry analyst Tina Hou. When discussing newly listed stocks, she highlighted some obvious advantages of ZK and then gave her long-term outlook: "We believe that by adopting a light-asset manufacturing model and leveraging the manufacturing capacity of its parent company (Geely), ZK is in a more favorable position in competition, which helps to alleviate the heavy up-front capital expenditure burden. Geely's mature supply chain also gives ZK cost advantages, and ZK's automotive contribution profit margin is higher at 18.2% (compared to Nio and Xpeng's contribution rates of 16.2% and 3.7%, respectively). In addition, ZK has net cash of RMB 3 billion and operating cash flow of RMB 2.3 billion in 2023."

For Tina Hou, this is a stock worth buying now. The analyst gives ZK a preliminary rating of "buy" and a target price of up to $34, which means a potential increase of up to 44% within a year.

Overall, Wall Street analysts' unanimous rating of "strong buy" for this newly listed US stock is based on three "buy" research reports. As of Monday's closing of the US stock, the stock closed at $23.66, and the average target price on Wall Street of $34.67 implies a potential upside of up to 46.5% in the next year.