Goldman Sachs says these 3 US stocks are set to rally

Goldman Sachs is bullish on Valvoline (VVV), Kontoor Brands (KTB), and BJ's Wholesale Club (BJ) for the second half of 2025, citing company-specific strengths and favorable market conditions. Valvoline is considered a "best-in-class" stock with limited tariff exposure, while Kontoor Brands is expected to recover due to its Lee and Wrangler brands and the Helly Hansen acquisition; KTB also offers a 3.35% dividend yield. Goldman Sachs anticipates BJ's Wholesale to benefit from strong tariff trends and unit volume growth, reiterating a buy rating with a $130 price target, representing an 18% potential upside.

Analysis

Goldman Sachs projects significant further upside for select U.S. equities in the second half of 2025, specifically highlighting Valvoline (VVV), Kontoor Brands (KTB), and BJ's Wholesale (BJ), despite an anticipated challenging macroeconomic environment. For Valvoline, the firm identifies it as a 'best-in-class' retail automotive services company with limited tariff exposure and substantial long-term growth potential, driven by its strong brand recognition and a mere 6% share of the 'do-it-for-me' oil change market, positioning it well irrespective of economic conditions. Kontoor Brands is anticipated to recover swiftly in the second half of 2025, with its Lee brand stabilizing, Wrangler brand momentum remaining robust, and the $900 million Helly Hansen acquisition viewed positively; KTB also offers an attractive 3.35% dividend yield and favorable positioning under current tariff policies. BJ's Wholesale is expected to benefit from 'strong tariff trends' and unit volume growth in grocery categories, with improved customer engagement in general merchandise potentially unlocking earnings upside in the latter half of 2025; Goldman Sachs reiterated a buy rating on BJ with a $130 price target, implying an 18% potential rally from current levels, though it does not pay a dividend. This stock-specific optimism is presented even as broader U.S. stock gains have been partly attributed to a temporary 90-day tariff pause agreed between the White House and President Xi’s office.

Key Decisions for Investors

• Investors could consider Valvoline for its perceived resilience to macroeconomic shifts and tariffs, coupled with its significant market share expansion runway in the automotive services sector.
• Kontoor Brands may present a recovery opportunity, with catalysts including brand stabilization, acquisition integration, and an appealing dividend yield; however, investors should monitor its brand performance and the evolving tariff landscape.
• BJ's Wholesale warrants attention for its potential to leverage favorable tariff trends and ongoing volume growth, with Goldman Sachs' $130 price target suggesting further upside, though the absence of a dividend should be factored into investment considerations.
• Given the challenging H2 2025 macroeconomic forecast, focusing on companies with strong fundamentals and specific catalysts, such as those highlighted by Goldman Sachs, could be a prudent strategy, while remaining vigilant about broader tariff policy shifts.