Goldman Sachs upgraded these ASX 200 shares including Wesfarmers Ltd (ASX: WES) and CSL Ltd (ASX: CSL) after earnings topped expectations.
The post Goldman Sachs upgraded these ASX 200 shares after outstanding results appeared first on The Motley Fool Australia. –
For some ASX 200 shares, it has been the toughest year in living memory. Especially for companies most negatively affected by lockdowns and global mobility. For others like retailers and healthcare, the demand for their goods and services is at all-time highs. The following ASX 200 shares were upgraded by Goldman Sachs last week following outstanding results that topped expectations.
Wesfarmers Ltd (ASX: WES)
Wesfarmers delivered a robust HY21 result driven by stronger in-house consumption that lifted its Bunnings, Officeworks and Kmart Group revenues. Management noted their improving confidence in the economic recovery, which is a notable improvement on prior cautious commentary from the company.
The conglomerate delivered stronger than expected 1H21 EBIT growth of 27.4% to $2.057 billion compared to Goldman’s forecasted 12.3%. As a result, Goldman revised its FY21/22 NPAT forecasts for this ASX 200 share to 16.3% and 21.9% respectively, with a 12-month price target of $59.70. This offers a potential return of 13.43% based on the current Wesfarmers share price.
Wesfarmers was upgraded from neutral to buy based on Goldman’s renewed positive outlook for the company. This included factors such as favourable housing cycles that could continue earnings momentum in Bunnings due to its exposure to DIY and trade home improvement categories, a turnaround for its Target business and potential for M&A opportunities.
CSL Limited (ASX: CSL)
Market darlings come and go, but it appears that CSL is forever. The company delivered a 15% increase in revenue while net profit after tax soared 44% in HY21. While the results appear outstanding at face value, the company did note that COVID-19 has tempered the performance of CSL Behring while boosting the performance of Seqirus. The biotech giant also brought attention to its risks, including challenging plasma collection conditions.
Despite these potential challenges, the company believes it is well placed to emerge strongly when the pandemic recedes and reaffirmed its FY21 guidance of $2.17 billion to $2.265 billion in NPAT.
Goldman remains positive on the outlook for this ASX 200 share, with a buy rating and 12-month price target of $329, representing an upside of around 23% to the current CSL share price.
Super Retail Group Ltd (ASX: SUL)
How the tables have turned. Retail shares have reported tech-like growth figures this reporting season, driven by an increase in online sales, in-house consumption and broad consumer spending recovery. Super Retail reported a 23.1% increase in group sales to $1.776 billion, while underlying NPAT soared 139% to $177.1 million.
Goldman believes Super Retail will continue to see elevated sales as it benefits from exposure to domestic travel. The company was upgraded to a buy rating with a 12-month price target of $14.80, nearly 22% above the current Super Retail share price.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
- 2 of the best ASX 200 blue chip shares to buy
- 3 ASX blue chip shares that just raised their dividends
- 3 reasons why the Wesfarmers (ASX:WES) share price could be a buy
- ASX 200 Weekly Wrap: ASX lower despite bumper dividends
- Top brokers name 3 ASX shares to sell next week
Kerry Sun 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. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post Goldman Sachs upgraded these ASX 200 shares after outstanding results appeared first on The Motley Fool Australia.