The team at Goldman Sachs has been running the rule over a number of ASX 200 shares this month.
Two that the broker rates highly right now are listed below. Here’s what it is saying about them:
Bank of Queensland Limited (ASX: BOQ)
This regional bank could be an ASX 200 share to buy according to Goldman Sachs. It was pleased with its recent trading update and notes that the company is performing better than expected so far in FY 2021. In light of this and recent share price weakness, the broker sees a lot of value in its shares currently.
Goldman Sachs has a buy rating and $9.67 price target on the company’s shares. This compares to the latest Bank of Queensland share price of $7.94.
Goldman commented: “Our recently revised FY22E revenue growth on pro-forma FY21A had been 1.2% and costs of -0.4%. This compares to their updated implied revenue growth guidance of +1% (i.e. at least 2% positive jaws guidance) and expenses of -1%. Therefore, with costs run-rating mildly better than we had expected, we make minor revisions to our FY22/FY23/FY24E EPS of +0.5%/+0.4/+0.1% and our TP moves to A$9.67 from A$9.66. Overall we maintain our Buy recommendation on BOQ, which we believe has more offsets to these mortgage NIM pressures in the form of i) BOQ’s more rate sensitive deposit book, and ii) the continued delivery of ME Bank synergies. Coupled with 33% TSR to our revised TP, we stay Buy.”
Harvey Norman Holdings Limited (ASX: HVN)
This retail giant could be a top option for investors right now. This is due to Goldman’s belief that the company will continue to benefit from strong consumer spending in the home category.
The broker has a buy rating and $6.00 price target on the retailer’s shares. This compares to the current Harvey Norman share price of $5.17.
Goldman explained: “We update our earnings outlook on HVN to reflect the latest trading update. We continue to expect the underlying sales growth vs. pre-COVID levels to remain strong due to the positive housing related spending environment and an overall expected increase in spending for the home category. Additionally, we also update our FX forecasts for HVN, in line with the latest GSe. Overall, this results in a revision of group EBIT outlook by +0.1% and +0.8% respectively over FY22 and FY23e respectively. Our 12m Target Price for HVN remains unchanged at A$6.00 and we maintain a Buy rating on HVN.”
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 and has recommended Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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