Morgans names 2 ASX 200 shares to buy

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The S&P/ASX 200 Index (ASX: XJO) is home to a good number of quality options that could be in the buy zone right now.

Two that the team at Morgans believe are buys are listed below. Here’s why its analysts rate these ASX 200 shares highly:

QBE Insurance Group Ltd (ASX: QBE)

Morgans is positive on this insurance giant and has named it as an ASX 200 share to buy. Its analysts currently have an add rating and $13.70 price target on its shares. This compares favourably to the current QBE share price of $11.29. The broker sees a lot of value in QBE’s shares at the current level, particularly given its improving outlook.

The broker commented: “We see QBE as likely having positive underlying momentum into next year. QBE has been putting through top-line rate increases of around 9%, which should assist margin expansion into FY22. With QBE’s balance sheet recently reset, pricing tailwinds evident and the stock relatively inexpensive trading on ~12.8x FY22F PE.”

Woodside Petroleum Limited (ASX: WPL)

Another ASX 200 share that Morgans thinks is in the buy zone is this energy producer. The broker has an add rating and $29.95 price target on its shares. This suggests major upside for the Woodside share price, which is currently fetching $21.80. Its analysts are very positive on its upcoming merger with the petroleum assets of BHP Group Ltd (ASX: BHP).

Morgans explained: “We believe WPL has benefited from being in the right place, at the right time. With: 1) BHP/WPL having an existing relationship, 2) BHP eager to boost its ESG profile, and 3) WPL being a quality operator (safe hands which is important for BHP).”

“From an economic standpoint we think WPL is clearly getting the better of the deal, with synergies not baked into deal metrics and BHP willing to accept a discount. The deal is transformative, lifting WPL into being a top 10 global E&P with +2 billion barrels of 2P reserves, with EBITDA of US$4.7bnpa and growth options,” it concluded.

The post Morgans names 2 ASX 200 shares to buy appeared first on The Motley Fool Australia.

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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 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.

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