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Bell Potter names the ASX industrials shares to buy in 2021

Bell Potter has named Flight Centre Travel Group Ltd (ASX:FLT) and this ASX industrials share as ones to buy in 2021. Here’s why…
The post Bell Potter names the ASX industrials shares to buy in 2021 appeared first on The Motley Fool Australia. –

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Analysts at Bell Potter have been busy finding ASX shares from several industries that they believe are best placed to have a strong 2021.

On this occasion, I’m going to look at the industrials sector. Here are a couple of shares they rate highly:

Carbon Revolution Ltd (ASX: CBR)

One share in the industrials sector that Bell Potter is positive on is Carbon Revolution. It is an advanced manufacturer that has developed single piece carbon fibre automotive wheels to an original equipment manufacturer (OEM) quality standard. Bell Potter has a speculative buy rating and $3.72 price target on its shares.

It notes that the company has achieved commercial adoption across several major models. This includes with car giants Ferrari and Ford.

The broker commented: “CBR is expecting to return to strong sales growth in 2H21e, after CY20 was characterised by COVID-related disruptions to key customers Ferrari and Ford, which are expected to continue to impact 2Q21e volumes.”

“We see a range of other positive catalysts in 2H21e that should support capital growth, including: (1) 2-4 official vehicle launches, two of which are expected to enter production; (2) positive gross profit before the end of CY21e; and, (3) the potential to win new vehicle programs, such as the Asian based OEM that is currently in engineering validation stage,” it added.

Flight Centre Travel Group Ltd (ASX: FLT)

Another industrial share that Bell Potter rates highly is this travel agent giant. The broker currently has a buy rating and $19.00 price target on Flight Centre’s shares.

It is a fan of the company largely due to its increasingly important corporate business, which it notes is now attributable to two-thirds of its earnings.

Its analysts commented: “We are most attracted to FLT’s Corporate business which generated 67% of FLT’s profit despite making up only 43% of the Company’s TTV.”

“The company also has a significant presence in the leisure travel market, particularly in Australia. This business – which naturally carries a high fixed cost-base due to its extensive in-store network has undergone a significant restructure since Covid-19 strangled the demand for travel – also provides a value driver which is leveraged to a rebound in international travel,” it added.

And while it recognises that the pandemic is not over and the short term carries risks, once the crisis passes it is expecting Flight Centre to “restore earnings at higher margins with the removal of structural costs and market leadership from FLT’s corporate business to be the key drivers of value over the long-term.”

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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 Carbon Revolution Limited. The Motley Fool Australia has recommended Carbon Revolution Limited and Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Bell Potter names the ASX industrials shares to buy in 2021 appeared first on The Motley Fool Australia.

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