Goldman Sachs adds CFG and CSL to its April US Conviction List; the list has outperformed major benchmarks since inception

Overview

This is Goldman Sachs' April 2026 update to the US Conviction List-Directors' Cut, whose core task is the monthly screening and maintenance of the most differentiated Buy-rated stocks within Goldman Sachs Americas research coverage. This month CFG and CSL are added, BAC and HSY are removed, and the report reviews performance, the macro market backdrop, thematic exposures, future catalysts, and analyst views on each constituent. The report clearly emphasizes that the Conviction List is not an actively managed portfolio, and that adding or removing a name does not necessarily imply a change in analyst rating.

Core views

Goldman Sachs believes that despite pressures from rising oil prices, sticky inflation, slowing growth, and Middle East energy supply shocks, there remains a set of differentiated Buy opportunities in US equities with strong risk-adjusted returns. The rationale for adding CSL is a potential positive inflection in 2026 revenue, technology-driven cost reduction, and buybacks supporting EPS growth; the rationale for adding CFG is improving returns, organic growth in private banking, operating savings initiatives, and potential upside to buybacks after 2027. At the list level, the equal-weight illustrative portfolio has generated a 71.0% total return since inception, outperforming the S&P 500, the S&P 500 Equal Weight, and Goldman Sachs' rated coverage benchmark.

Analysis framework

The report combines a top-down and bottom-up approach: first discussing the macro and cross-asset environment, including energy shocks, inflation, employment, interest rates, credit, and industry supply chains; then mapping those factors to specific sector themes such as food, chemicals, LNG, electrification, jet fuel, and AI infrastructure; and finally using coverage analysts to provide stock-level target prices, upside, valuations, catalysts, and differentiated views. List selection is jointly made by Goldman Sachs Americas Research's Investment Review Committee and industry analysts.

Methodology notes

• Stock selectionConviction List-Directors' Cut

  Select 20-25 differentiated Buy-rated stocks from Goldman Sachs Americas research coverage

  The list emphasizes analyst conviction, differentiated views, and higher risk-adjusted returns. It is refreshed monthly, but it is not an actual investment portfolio and has no constraints on risk, liquidity, volatility, factor exposure, size, or sector weights.

• Performance evaluationHit rate and equal-weight illustrative portfolio

  Measure list effectiveness using the proportion of stocks that outperform the benchmark and the return of an equal-weight illustrative portfolio

  Hit rate is defined as the proportion of stocks that outperform the specified benchmark during the list period; the equal-weight illustrative portfolio is calculated using dollar total return, rebalanced monthly, and weights are reallocated proportionally when constituents change.

• Macro theme mappingEnergy shock and sector exposure analysis

  Map Middle East energy supply shocks to sectors and list stocks

  The report tracks themes including oil, natural gas, fertilizers, chemicals, LNG, aviation fuel, electrification, and AI infrastructure, and identifies the stocks on the list that benefit or come under pressure.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• CFG / Citizens Financial Group

  Newly added list stock this period

  Strengths

  Has a stronger return-on-equity improvement story, organic growth in private banking, an operating savings plan, and potential upside to buybacks as capital rolls down after 2027.

  Weaknesses

  Still exposed to bank capital rules, the credit cycle, and the interest-rate environment.

  Comparison

  The report suggests its residential and commercial loan portfolio may benefit more than peers under proposed changes to bank capital rules.

  Risks

  Slower macro growth, rising credit costs, and capital-rule changes that fall short of expectations.

• CSL / Carlisle Cos

  Newly added list stock this period

  Strengths

  The analyst expects a positive inflection in revenue in 2026, cost reductions from technology, and buybacks supporting EPS growth, with EPS growth potentially accelerating in 2027.

  Weaknesses

  Non-residential construction activity may still remain weak.

  Comparison

  The stock's NTM P/E is around 16x, below the roughly 18x average since the company became a pure-play building products company in 2024.

  Risks

  Construction demand recovery slower than expected, insufficient realization of cost efficiencies, and delayed valuation re-rating.

• GLNG / Golar LNG

  Beneficiary of the LNG supply shock

  Strengths

  The Middle East conflict disrupted Qatar LNG supply, global LNG prices rose, the company's share price increased sharply in March, and it announced a strategic review.

  Weaknesses

  Longer term, the release of new global LNG supply remains a headwind.

  Comparison

  The report says average US LNG margins in 2026-2028 rise by more than 200%, but still remain below the 2022 peak.

  Risks

  Qatar production resumes faster than expected, LNG prices retreat, and the outcome of the strategic review disappoints.

• COP / ConocoPhillips

  Oil-price upside and free cash flow theme

  Strengths

  Benefits from higher oil prices, while the analyst believes it also has resilience in a more normalized environment, and expects free cash flow per share CAGR of 20%-25% through 2030.

  Weaknesses

  Energy prices are highly cyclical.

  Comparison

  Compared with a typical oil and gas name, the report highlights that its growth projects and cost-cutting plans support mid-cycle performance.

  Risks

  Brent prices fall, project execution risk, and cost cuts fall short of expectations.

• NOW / ServiceNow

  High-upside TMT stock on the list

  Strengths

  The table shows a high 12-month target-price upside versus the current price, making it a selected Buy in software applications.

  Weaknesses

  Valuations in high-growth software are sensitive to rates and risk appetite.

  Comparison

  In the table, NOW's target-price upside is 107%, above most list names.

  Risks

  Slower enterprise software spending, uncertainty around AI investment returns, and valuation compression.

• DASH / DoorDash

  Selected Buy in internet and consumer services

  Strengths

  The table shows a relatively high target-price upside and it is one of the list names in TMT / internet content and information.

  Weaknesses

  The business is sensitive to consumer spending, competition, and the platform subsidy environment.

  Comparison

  The table shows DASH with 90% target-price upside, placing it near the top of the list.

  Risks

  Consumer slowdown, regulatory pressure, and intensifying competition in delivery and local services.

• BAC / Bank of America

  Removed from the list this period

  Strengths

  The report notes that removal from the list does not imply a rating change and that it remains rated Buy.

  Weaknesses

  It is no longer viewed by the committee as one of the current top 20-25 investment opportunities.

  Comparison

  Being replaced by CFG shows that this period's financials preference shifted from large diversified banks toward regional-bank opportunities with stronger return improvement and capital-return flexibility.

  Risks

  Removal from the list may reduce short-term attention, but it does not equal a downgrade in fundamentals.

• HSY / Hershey

  Removed from the list this period and had weak March performance

  Strengths

  The coverage analyst still believes HSY pricing can remain sticky and sees some improvement in categories under market-share pressure.

  Weaknesses

  Investors are concerned about promotions increasing in a mixed consumer backdrop, pricing power, and market share.

  Comparison

  Compared with consumer names that remain on the list, HSY is no longer viewed by the committee as a top current opportunity.

  Risks

  Greater promotional pressure, weak consumer demand, and volatility in cocoa and food costs.

Key data

• New stocks this periodCFG, CSLCitizens Financial Group and Carlisle Cos were added to the US Conviction List.
• Stocks removed this periodBAC, HSYBank of America and Hershey were removed from the list, but the report notes that these stocks remain rated Buy, so list changes do not equal rating changes.
• Total return since inception71.0%On an equal-weight illustrative portfolio basis, from June 1, 2023 through March 2026.
• Excess return versus S&P 500+10.2 percentage pointsThe Conviction List's outperformance versus the S&P 500 since inception.
• Excess return versus S&P 500 Equal Weight+26.8 percentage pointsThe Conviction List's outperformance versus the S&P 500 Equal Weight since inception.
• Total return over the past 12 months27.7%During the same period, the S&P 500 returned 17.8% and the S&P 500 Equal Weight returned 12.9%.
• 2026 Brent average price forecast$85/bblThe report cites Goldman Sachs' oil price forecast, reflecting the upward revision after the Middle East conflict and the Hormuz supply shock.
• Target list size20-25 Buy-rated stocksThe report says the list is intended to cover the most differentiated fundamental Buy views in Goldman Sachs Americas research.

Impact & implications

For investors, the main value of this report is not a single-company rating, but a high-conviction set of themes and stock ideas in US equities from Goldman Sachs. The addition of CFG and CSL shows greater emphasis on improving capital returns in financials and an earnings inflection in industrials; the energy shock raises attention on related names such as GLNG and COP, while also potentially increasing cost pressure on food, chemicals, airlines, and consumer chains. AI infrastructure demand remains a continuing upside theme, with AVGO, CLS, KEYS, and DUK listed as related beneficiaries.

Risks

• The duration of the Middle East conflict and the Hormuz energy supply shock is uncertain and could further push up oil, fertilizer, chemical, and jet fuel costs.
• If inflation becomes even more entrenched, companies may cut headcount and capital expenditure, weighing on growth and earnings.
• The labor market has already shown signs of slowing; the report cites February nonfarm payrolls falling by 92k, unemployment rising to 4.4%, and expects unemployment to rise to 4.6% in 2026.
• Although credit spreads remain tight, changes in the investor base for credit markets may weaken their usefulness as a leading indicator of corporate stress.
• The list is not a portfolio and lacks sector, factor, liquidity, and volatility constraints, so investors cannot treat it as a directly replicable portfolio.
• Adding or removing a name does not equal a rating change, and misreading it as such could lead to investment decision errors.

What to watch

• Changes in CFG's ROTCE improvement, private banking growth, the 'reimagine the bank' savings plan, and buyback expectations after 2027.
• Whether CSL can deliver the 2026 revenue inflection, cost efficiency, buybacks, and EPS acceleration in 2027.
• Brent oil prices, the Hormuz route, the pace of Qatar LNG supply recovery, and delays in new global LNG supply.
• Whether AI infrastructure demand continues to rise, and the order flow and earnings delivery of related stocks such as AVGO, CLS, KEYS, and DUK.
• Upcoming earnings catalysts and option-implied volatility for stocks on the list, especially events that could change investor confidence in analyst views.
• The impact of consumer spending, gasoline prices, and the promotional environment on consumer-chain names such as MCD, DKS, KTB, and HSY.