The soon-to-be 47th President of the United States is also known as the author of “The Art of the Deal,” and President-elect Trump's penchant for dealmaking was evident during his campaign when he repeatedly stated that he could leverage his skills to broker peace in two of the most significant geopolitical flashpoints that have erupted in the last five years, in Ukraine and the Middle East.
Here at home, analysts expect another Trump administration to create a conducive environment for corporate dealmaking, and analysts at Goldman Sachs believe that 2025 will be the year of the deal on Wall Street, aided by a softer regulatory environment. The brokerage firm recently released a list of companies with major M&A appeal for investors to consider, and these five candidates - all down sharply from their record highs - could be compelling bargains for potential suitors.
#1. Kosmos Energy
Founded in 2003 by a group of seasoned oil and gas professionals, Kosmos Energy (KOS) is an international oil and gas exploration and production company headquartered in Dallas. Kosmos focuses on frontier and underexplored regions, primarily along the Atlantic Margin. Its operations span Ghana, Mauritania, Senegal, Equatorial Guinea, and the Gulf of Mexico, with additional exploration licenses in locations such as São Tomé and Príncipe and Morocco.
Valued at a market cap of $1.84 billion, KOS stock is down 41.6% on a YTD basis, and has slipped 61% off its 2015 highs.
Analysts maintain a rating of “Strong Buy” for KOS stock, with a mean target price of $6.46. This denotes an upside potential of about 65.6% from current levels. Out of 7 analysts covering the stock, 5 have a “Strong Buy” rating and 2 have a “Hold” rating.
#2. Wolfspeed
Initially founded in 1987 as Cree, Wolfspeed (WOLF) specializes in developing and manufacturing wide-bandgap semiconductors. These materials, particularly silicon carbide, are critical in high-efficiency power and radio frequency (RF) applications. The company's products are used in electric vehicles (EVs), renewable energy, telecommunications, and defense systems. It is known for being the only vertically integrated, pure-play silicon carbide manufacturer. WOLF's market cap currently stands at $822 million.
WOLF stock has nosedived 85% on a YTD basis, and is down 95% from its November 2021 peak.
Overall, analysts have deemed WOLF stock a “Hold,” down from “Moderate Buy” two months ago. Out of 15 analysts covering the stock, 4 have a “Strong Buy” rating, 9 have a “Hold” rating, 1 has a “Moderate Sell” rating, and 1 has a “Strong Sell” rating.
The mean target price is $14.81, which indicates an upside potential of roughly 133% from current levels.
#3. Unity Software
Founded in 2004, Unity Software (U) provides a comprehensive platform for creating and managing interactive, real-time 2D and 3D content across various industries, including gaming, film, architecture, automotive, and virtual/augmented reality. Its current market cap stands at about $8.7 billion.
Shares of Unity are down 46% on a YTD basis, and have stumbled 88% from their 2021 peak.
Overall, analysts have deemed Unity stock a “Moderate Buy,” up from “Hold” three months ago, with a mean target price of $22.46. This reflects an upside potential of about 4% from current levels. Out of 19 analysts covering U stock, 6 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, 10 have a “Hold” rating, and 2 have a “Strong Sell” rating.
#4. Zoom
Pandemic darling Zoom (ZM) has retreated massively from its 2020 highs. Founded in 2011, Zoom is a leading provider of unified communications platforms offering cloud-based video conferencing, online chat, and mobile collaboration solutions. The company's platform offers a user-friendly interface and robust features, making it popular for remote work, virtual meetings, and online education. Zoom currently commands a market cap of $24.2 billion.
ZM stock is up 10.7% on a YTD basis, but has slumped about 86% from its 2020 highs.
Overall, analysts have an average rating of “Hold” for ZM stock, with a mean target price of $75.39, which the shares have already surpassed. Out of 28 analysts covering the stock, 7 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, 18 have a “Hold” rating, and 2 have a “Strong Sell” rating.
#5. Twilio
We conclude our list with Twilio (TWLO), a cloud communications platform company headquartered in San Francisco. Twilio's platform enables developers to integrate voice, messaging, and video communication capabilities into applications via APIs. Twilio specializes in communications platform-as-a-service (CPaaS). It provides tools for businesses to build seamless communication experiences, such as SMS notifications, email campaigns, and customer engagement solutions.
Valued at a market cap of about $15 billion, TWLO stock is up 31.4% on a YTD basis, outpacing the broader market. However, the shares are down roughly 78% from their 2021 peak.
Overall, analysts consider TWLO stock to be a “Moderate Buy,” although the shares - just shy of $100 currently - trade well above the mean price target of $86.32. Out of 26 analysts covering the stock, 11 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, 11 have a “Hold” rating, 1 has a “Moderate Sell” rating, and 1 has a “Strong Sell” rating.
