Goldman analysts say these stocks have the most downside potential
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.