GOLDMAN: These Are The 19 Most Overpriced Stocks In The Market

The S&P 500 and Dow Jones indexes have hit all-time highs in recent weeks.

According to Goldman Sachs’ David Kostin, this 5-year old bull market has further to run.

But even Kostin and his team believe some stocks are trading way above fair value.

In his new quarterly chartbook, Kostin lists 40 stocks that are the most overpriced in the market relative to Goldman Sachs analysts’ price targets.

Tech companies dominate this list.

What follows are the 19 stocks that Kostin says have at least a 15% downside relative to their recent prices.

16. Teradata Corp.

Ticker: TDC

Price as of September 30: $US41.92

Downside to target: 16.5%

Comment: International revenue grew 14 per cent in the second quarter.

Source: Goldman Sachs

15. Dun & Bradstreet

Ticker: DNB

Price as of September 30: $US117.47

Downside to target: 16.6%

Comment: Dun & Bradstreet announced a partnership with Oracle to integrate their commercial business, social and professional contact data with Oracle's cloud applications.

Source: Goldman Sachs

14. Xerox Corp.

Ticker: XRX

Price as of September 30: $US13.23

Downside to target: 16.9%

Comment: Xerox earned $US5.3 billion in revenues in the second quarter, down 3 per cent from the previous year. its services business, which makes up 57% of total revenue, was $US3 billion, up 1 per cent year-over-year.

Source: Goldman Sachs

13. NASDAQ OMX Group

Ticker: NDAQ

Price as of September 30: $US42.42

Downside to target: 17.5%

Comment: 'Strong growth in our Information Services and Market Technology business segments, and materially year-over-year market share gains in our U.S. and European cash equity operations,' CEO Robert Greifeld said on the second quarter earnings call. 'Revenues during the quarter reached near record highs at $US523 million and non-GAAP diluted EPS was $US0.70, up 13% year-on-year.'

Source: Goldman Sachs

12. Patterson Companies

Ticker: PDCO

Price as of September 30: $US41.43

Downside to target: 17.9%

Comment: In October, Patterson announced a partnership with Abaxis Inc. and will sell the full line of Abaxis' veterinary products.

Source: Goldman Sachs

11. Transocean Ltd.

Ticker: RIG

Price as of September 30: $US31.97

Downside to target: 18.7%

Comment: Transocean's r
evenues were $US2.328 billion in the second quarter compared with $US2.339 billion in the first quarter of 2014 - a 0.5% decline.

Source: Goldman Sachs

10. Kohl's Corp.

Ticker: KSS

Price as of September 30: $US61.03

Downside to target: 19.7%

Comment: Kohl's will hire more than 67,000 temporary staff for the upcoming holiday season.

Source: Goldman Sachs

9. Western Digital

Ticker: WDC

Price as of September 30: $US97.32

Downside to target: 19.9%

Comment: 'Revenue for fiscal year 2014 was $US15.1 billion, including $US509 million from enterprise SSD which represented a 43 per cent increase from fiscal year 2013,' CFO Tim Leydon said on the fourth quarter earnings call. 'We continue to make progress on our journey towards a more diversified revenue mix, with 53 per cent of our revenue coming from our Branded, Consumer Electronics and Enterprise HDD and SSD businesses.'

Source: Goldman Sachs

8. Microsoft Corp.

Ticker: MSFT

Price as of September 30: $US46.36

Downside to target: 22.3%

Comment: Microsoft unveiled its latest operating system called Windows 10 late September.

Source: Goldman Sachs

6. KLA-Tencor Corp.

Ticker: KLAC

Price as of September 30: $US78.78

Downside to target: 26.4%

Comment: The company's net income fell $US133 million in Q4 2014 from $US139 million in the same quarter the previous year - a 4.3% decrease.

Source: Goldman Sachs

5. Legg Mason Inc.

Ticker: LM

Price as of September 30: $US51.16

Downside to target: 27.7%

Comment: Our unfunded wins pipeline actually increased month-over-month to $US8.7 billion, representing the highest pipeline of unfunded wins in recent memory,' CEO Joe Sullivan said at a recent investor day.

Source: Goldman Sachs

4. Sigma-Aldrich Corp.

Ticker: SIAL

Price as of September 30: $US136.01

Downside to target: 27.9%

Comment: Merck announced its acquisition of Sigma-Aldrich for $US17 billion and $US140 per share last month.

Source: Goldman Sachs

3. Gilead Sciences

Ticker: GILD

Price as of September 30: $US106.45

Downside to target: 28.6%

Comment: 'During the second quarter, Gilead continued to make significant progress led by strong Sovaldi sales. Since December's launch, Sovaldi has been prescribed for more than 80,000 patients in the U.S. and Europe, underscoring the medical community's recognition of the benefits of this product,' said John C. Martin, PhD, Gilead's CEO, in its earnings statement.

Executive Officer. '

Source: Goldman Sachs

2. Celgene Corp.

Ticker: CELG

Price as of September 30: $US94.78

Downside to target: 30.4%

Comment: Last month the FDA approved Celgene's Oral OTEZLA drug for the treatment of patients with moderate to severe plaque psoriasis, a skin condition.

Source: Goldman Sachs

1. Intel Corp.

Ticker: INTC

Price as of September 30: $US34.82

Downside to target: 42.6%

Comment: 'With the ramp of our Baytrail SoC family, we have expanded into new segments such as Chrome-based systems, and we are on track to meet our 40 million unit tablet goal,' CEO Brian Krzanich said in the second quarter earnings statement. 'In addition, we hit an important qualification milestone for our upcoming 14nm {C}Broadwell product, and expect the first systems to be on shelves during the holidays.'

Source: Goldman Sachs

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