Goldman Sachs adds a beer giant and a major bank to its favorite stock picks

Goldman Sachs added Deutsche Bank and Carlsberg to its November European Conviction List, citing Deutsche’s potential for about €2 billion ($2.24 billion) in savings and return on tangible equity above 13% from 2028; its €44.25 target implies 47% upside. Goldman’s 1,200 Danish kroner target for Carlsberg implies 24% upside, with forecast 2027 organic sales growth of 3.8% versus 3.4% consensus and net debt expected to decline from 3.0x earnings in 2025 to 2.5x in 2027. The bank also cited potential buybacks at both companies, while removing HSBC, Haleon and CTP from the list.

Analysis

The list change is a research signal, not an earnings catalyst; the unusually large upside figures for Ceres Power and Rheinmetall are especially poor standalone trade inputs without valuation assumptions and forecast detail. The more testable theses are Deutsche Bank’s cost execution and Carlsberg’s mix, integration and balance-sheet path.

For Deutsche Bank (DB), the potential upside is asymmetric only if cost savings translate into a higher return on tangible equity without weakening control functions or service quality. German infrastructure and defense spending could support financing demand, but revenue conversion depends on project timing, competition and credit quality—not spending announcements alone. Over 1–3 months, watch guidance on costs, capital returns and credit provisions; over 6–18 months, the key test is whether returns converge toward management’s stated ambition. A weaker German growth outlook or higher provisions would undermine the rerating case.

For Carlsberg (CARL.B), soft drinks and PepsiCo bottling could diversify exposure if beer volumes soften, but acquired scale is not automatically incremental value: integration, pricing and debt reduction determine whether margin gains reach equity holders. Deleveraging and any buyback restart are conditional, not assured. Competitor responses from Heineken and AB InBev could limit pricing power. Goldman’s removal of HSBC, Haleon and CTP should not be read as negative fundamental news by itself; list inclusion/removal can create short-lived flows without changing earnings. Overall, prefer catalyst-backed monitoring over chasing analyst-implied upside.

Key Decisions for Investors

• DB: Consider a staged long only on evidence in upcoming results or guidance that operating costs are falling and credit quality remains controlled. Falsify the thesis if cost targets slip, provisions rise materially, or capital returns are constrained; avoid treating the stated savings estimate as secured.
• CARL.B: Keep on a 1–3 month catalyst watch rather than buying solely on the target price. Reassess after disclosure on Britvic integration, organic volumes and net debt; failure to deleverage or weak soft-drink contribution would weaken the case. Do not assume a buyback until formally announced.
• Avoid initiating positions in CWR or RHM solely on the cited triple-digit upside estimates; seek the underlying earnings, valuation and funding assumptions first. For RHM, separately monitor defense order conversion and delivery capacity before treating sector demand as equity earnings.
• Treat HSBC’s, Haleon’s and CTP’s removal from the list as relative-flow information, not a short signal. Consider a relative-value position only if subsequent earnings revisions or valuation data independently support it.