Many brokers think that the 2 ASX shares revealed here could be buys, including global property business Goodman Group (ASX:GMG).
The post 2 ASX shares that many brokers think could be buys appeared first on The Motley Fool Australia. –
There are several brokers that all think the two ASX shares in this article are buys.
It might suggest there’s an opportunity for investors if many analysts believe that the same business is worth looking at. Of course, there’s a chance that they’re all simultaneously wrong.
At the moment, these two are highly rated:
Goodman Group (ASX: GMG)
Goodman is currently rated as a buy by at least six brokers. One of those that rates the global property business as a buy is Citi which has a price target on Goodman of $22.10.
Citi noted that things are getting better for Goodman as conditions recover quicker than expected.
In the third quarter of FY21, the business saw total assets under management (AUM) increase to $52.9 billion. Looking at the property portfolio that it owns, it achieved like for like net property income (NPI) growth of 3.3% and a high occupancy rate of 98% which reflects the strong demand for its properties.
Goodman explains that the demand is being driven by increased intensification of use, long-term supply chain requirements, tight supply in urban infill locations and the quality of its assets.
The ASX share noted that location and quality remains critical in meeting clients’ requirements, providing faster lead times to consumers. This is driving consistent long-term cashflow growth to the group.
Goodman’s development workbook continues to grow – it reached $9.6 billion at 31 March 2021 and is expected to be higher by June 2021. The average duration of projects in its current work in progress (WIP) is now around 19 months, so its production rate is currently an annualised $6 billion.
Projects have increased in size and scale, given the concentration in urban locations around the world, with approximately 60% of current WIP now multi-storey.
In FY21, Goodman is expecting operating earnings per share (EPS) to grow by 12%.
TPG Telecom Ltd (ASX: TPG)
TPG is now one of the biggest telecommunication businesses in Australia after the merger with between TPG and Vodafone Australia.
The telco is rated as a buy by at least five analysts, including Ord Minnett which rates the ASX share as a buy with a price target of $6.45.
TPG’s share price has fallen by more than 30% over the last six months. The broker thinks that COVID-19 and leadership changes have been weighing on the stock. Both the TPG chief financial officer (CFO) Stephen Banfield and Chair David Teoh have resigned in recent months.
But, Ord Minnett thinks that TPG can generate growing profit as it achieve the synergies that were expected with the merger. In 2021 it’s targeting $70 million of cost synergies across the group, which excludes the contribution from fixed wireless services and revenue synergies from cross-selling.
In its latest result it said that in the first six months post-merger it generated $342 million of net cash flow and it declared a maiden dividend of 7.5 cents per share.
5G could be an important part of profit generation in future years, it’s now live in more than 350 suburbs in Sydney, Melbourne, Brisbane, Adelaide, Perth, Canberra, Gold Coast and Newcastle.
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