Xero Limited (ASX:XRO) and this ASX 50 share have been given buy ratings. Here’s why they could be top options for investors today…
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The S&P/ASX 50 index is home to 50 of the largest listed companies on the Australian share market.
While not all of the shares on the index are necessarily in the buy zone, two that could be are listed below. Here’s what you need to know about them:
The first ASX 50 share to look at is CSL. It is one of the world’s leading biotechnology companies with a portfolio of leading therapies and vaccines. This includes flu vaccines, immunoglobulins, and countless other plasma-based products.
However, the company isn’t settling for that. Each year CSL invests somewhere in the region of 11% of its sales back into research and development (R&D) activities. This ensures that the company’s R&D pipeline is filled to the brim with products that have the potential to generate millions and potentially even billions of dollars in sales each year.
In light of this and the improving outlook for plasma collections, a number of brokers are tipping CSL as a buy.
One of those is Citi. The broker currently has a buy rating and $310.00 price target on its shares.
Another ASX 50 share to consider buying is Xero. It is a leading cloud-based business and accounting software provider with a focus on small to medium sized businesses.
Over the last few years the Xero platform has evolved from a basic accounting solution into a full service small business solution. This has gone down well with small to medium sized businesses globally, leading to stellar subscription and revenue growth.
This continued in FY 2021, with Xero recently reporting an 18% increase in revenue to NZ$848.8 million and a 39% jump in EBITDA to NZ$191.2 million.
Looking ahead, Xero still has an enormous runway for growth. This is being underpinned by the ongoing shift to cloud solutions, its international expansion, and its burgeoning app ecosystem. The latter has been bolstered recently by a number of bolt on acquisitions such as Planday, Tickstar, and Waddle.
Goldman Sachs is very positive on its future. In light of this, it recently reaffirmed its buy rating and $153.00 price target on the company’s shares.
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*Returns as of February 15th 2021
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Xero. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.