Goldman Sachs has shaken up its US “conviction list – directors’ cut”, adding oil major ConocoPhillips (NYSE:COP, XETRA:YCP) and aerospace supplier Loar Holdings (NYSE:LOAR), while removing Huntington Ingalls Industries Inc (NYSE:HII), Valero Energy Corp (NYSE:VLO) and Madison Square Garden Entertainment (NASDAQ:MSG).
The changes come against what the bank describes as a shifting market backdrop in which investors are rotating toward “heavy assets” – capital-intensive businesses seen as less vulnerable to AI disruption.
Electricity grids, pipelines, utilities and industrial capacity are back in favour, Goldman argues, as technology growth becomes increasingly dependent on physical infrastructure.
ConocoPhillips is pitched as “big oil shifting to harvest mode”. Analyst Neil Mehta expects a “positive free cash flow inflection” over the next three years as major projects come online and capital spending falls.
Goldman forecasts roughly $7 billion of incremental free cash flow by 2029 at $70 a barrel oil, with scope for a near 45% rise in annual capital returns by 2030.
Loar, by contrast, is framed as an “early stage aerospace M&A compounder”.
Goldman highlights its strong margins, high aftermarket exposure and balance sheet capacity to pursue tuck-in acquisitions in a fragmented supply chain.
The bank sees it as one of the sector’s highest-quality earnings compounders, still in the early stages of growth.
The Goldman conviction list, a curated selection of 20-25 'buy'-rated stocks, is refreshed monthly and is designed to showcase the investment bank's most 'differentiated' US ideas.