Western Digital and Intel are up by double digits in 2023, but Goldman Sachs says these shares may see sharp declines. Despite a volatile interest rate environment and a rough third quarter, the Wall Street firm maintains an overall positive outlook on the equity market. Chief U.S. equity strategist David Kostin predicts the S & P 500 will rise 5% to 4,500 by year-end, citing roughly flat multiples and modest earnings growth. But even given this optimism, Goldman believes some stocks are bound to fall. In a recent note, the firm detailed several stocks that have the most downside potential based on Goldman’s respective target prices. Take a look at some of these expected losers, with prices and downside current as of the end of September: Computer drive manufacturer Western Digital has rallied nearly 43% since the start of the year, making it one of the best performers in the S & P 500, but Goldman believes the stock could still fall 32%. This summer, Western Digital issued weak guidance for its fiscal first quarter, calling for a loss ranging between $2.10 and $1.80 per share, excluding items. Analysts polled by FactSet called for a loss of $1.43 per share. Goldman also expects chip giant Intel to dive 21%. Shares are already up 35% in 2023. In July, Intel posted second-quarter results that showed a return to profitability following two consecutive quarters of losses. On Tuesday, Intel said it would operate its programmable chip unit as a stand-alone business , with the goal of conducting an initial public offering for this business within the next two to three years. Airbnb is another high flyer that could be due for a decline, according to Goldman. The firm sees a descent of more than 14% for the lodging stock, a sharp turn from its 49% year-to-date gain. Recently, KeyBanc Capital Markets downgraded Airbnb to sector weight from overweight. KeyBanc analyst Justin Patterson cited slowing revenue growth and a near-term peak in margins as reasons for the downgrade. Other names on Goldman’s list include Northrop Grumman , APA , Hormel Foods and Aflac . — CNBC’s Michael Bloom contributed reporting.
