Why does Goldman Sachs like Telstra and Coles shares right now?
The post 2 defensive ASX 200 shares that brokers rate as ‘buys’ this Monday appeared first on The Motley Fool Australia. –
The S&P/ASX 200 Index (ASX: XJO) is having a rather dreadful start to the week this Monday. At the time of writing, the ASX 200 is down 0.87% to 7,284 points.
But many investors love to buy ASX shares on days like today, simply because they can pick up their favourite shares for a relatively cheaper price. With uncertainty seemingly returning to the share market, many investors might also be looking to shares that can be labelled as ‘defensive shares’, companies that are capable of generating cash flows regardless of the economic weather.
So with that in mind, here are 2 defensive ASX 200 shares that brokers rate as ‘buys’ today:
2 defensive ASX 200 shares rated as ‘buys’ this Monday
Coles Group Ltd (ASX: COL)
Coles is one of the largest defensive ASX 200 shares on the share market today. And it doesn’t get too much more defensive than the groceries and other household essentials that Coles sells through its huge network of stores nationwide. We all by now would be familiar with the heightened levels of grocery consumption that COVID outbreaks seem to induce.
Coles has actually not been a great performer of late. This company is still down more than 7.5% year to date in 2021 so far, and is also down 4.5% over the past 12 months. However, one broker who thinks the Coles share price might be an ASX 200 buy today is investment bank, Goldman Sachs. Goldman currently has Coles rated as a ‘buy’, with a 12-month share price target of $19.40 a share.
This implies a potential future upside of more than 13% over the next 12 months (not including any dividend returns either). Goldman likes Coles shares right now due to the company’s Smarter Selling cost-cutting program, as well as its efficiency-driving investments in its supply chains.
Telstra Corporation Ltd (ASX: TLS)
Telstra is our second ASX 200 share to look at today. This telco is also arguably a highly defensive share. It’s difficult to imagine most Australians giving up their phones, internet plans or broadband connections these days, no matter the economic weather. And Telstra is the country’s leading purveyor of all three.
Unlike Coles, the Telstra share price has actually been a very rewarding asset to own in recent months. Telstra shares are currently up almost 25% year to date so far, as well as being up nearly 11% over the past 12 months.
Goldman is also bullish on Telstra, rating the telco as a ‘buy’ with a 12-month share price target of $4.20 a share. This implies a potential future upside of 11.7% for this ASX 200 share, also not including any dividend returns. Goldman reckons Telstra’s recent sale of half of its mobile towers is conducive to future shareholder value. Additionally, Goldman likes Telstra’s “strong earnings outlook, particularly in mobile”.
The post 2 defensive ASX 200 shares that brokers rate as ‘buys’ this Monday appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen owns shares of Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.