‘Laggard’ stocks with expanding FCF margins and attractive FCF yields – Goldman
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Goldman Sachs listed their best free cash flow ideas, including Biogen (BIIB), Merck & Co. (MRK), and Regeneron Pharma (REGN).
These are stocks that offer expanding free cash flow margins through 2026, and attractive free cash flow yields through 2026.
Analysts screened for buy-rated stocks “that offer improving free cash flow margins (FCF as percentage of sales) in each of 2025 and 2026 estimates, as well as valuation support in the form of above coverage median FCF yields in 2025E and 2026E,” according to Deep Mehta, vice president at Goldman Sachs, in a tactical research note.
In addition, analysts only used names with positive sales growth during this period.
Here is the list:
- Biogen (BIIB) – FCF margin 2025: 35%; FCF yield 2025: 14%
- Merck & Co. (MRK) – FCF margin 2025: 30%; FCF yield 2025: 8%
- Regeneron Pharmaceuticals (REGN) – FCF margin 2025: 30%; FCF yield 2025: 5%
- Pfizer (PFE) – FCF margin 2025: 29%; FCF yield 2025: 13%
- Pinterest (PINS) – FCF margin 2025: 28%; FCF yield 2025: 6%
- ON Semiconductor (ON) – FCF margin 2025: 27%; FCF yield 2025: 7%
- Neurocrine Biosciences (NBIX) – FCF margin 2025: 26%; FCF yield 2025: 6%
- Informatica (INFA) – FCF margin 2025: 26%; FCF yield 2025: 6%
- ICON (ICLR) – FCF margin 2025: 15%; FCF yield 2025: 7%
- IQVA Holdings (IQV) – FCF margin 2025: 13%; FCF yield 2025: 6%
- Bath & Body Works (BBWI) – FCF margin 2025: 12%; FCF yield 2025: 12%
- Fortune Brands Innovations (FBIN) – FCF margin 2025: 11%; FCF yield 2025: 6%
- Weatherford International (WFRD) – FCF margin 2025: 11%; FCF yield 2025: 11%
- TripAdvisor (TRIP) – FCF margin 2025: 11%; FCF yield 2025: 11%
- Avantor (AVTR) – FCF margin 2025: 10%; FCF yield 2025: 5%
- Mattel (MAT) – FCF margin 2025: 10%; FCF yield 2025: 9%
- LivaNova (LIVN) – FCF margin 2025: 10%; FCF yield 2025: 5%
- Aptiv (APTV) – FCF margin 2025: 8%; FCF yield 2025: 13%
- Textron (TXT) – FCF margin 2025: 7%; FCF yield 2025: 7%
- KBR Inc. (KBR) – FCF margin 2025: 6%; FCF yield 2025: 6%