Why Morgans just added these ASX 200 shares to its best ideas list

As mentioned here earlier, Morgans removed BHP Group Ltd (ASX: BHP) shares from its best ideas list this month. This is the first time it hasn’t been on the list in three years.

Morgans’ best ideas are those that it thinks offer the highest risk-adjusted returns over a 12-month timeframe. They are supported by a higher-than-average level of confidence and are the broker’s most preferred sector exposures.

Replacing the miner was mining and mining services company Mineral Resources Ltd (ASX: MIN).

But that wasn’t the only change. Listed below are the ASX 200 shares that joined the list in February.

CSL Limited (ASX: CSL)

Morgans sees this ASX 200 share as a key pick for a portfolio. It added the biotherapeutics giant to its best ideas list with an add rating and $312.20 price target. The broker commented:

A key portfolio holding and key sector pick, we believe CSL is poised to break-out this year, a COVID exit trade, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares offering good value trading around its long term forward multiple of 31.5x.

Megaport Ltd (ASX: MP1)

This network as a service provider’s shares were added to list with an add rating and $8.25 price target. The broker explained:

MP1 is the world leader in Network as a Services (NaaS). They have first mover advantage, scale and technical expertise which means they are well placed to grow rapidly and maintain a healthy competitive advantage.

Mineral Resources

As mentioned above, Mineral Resources was added to list in the place of BHP this month. Morgans has an add rating and $99.40 price target on the ASX 200 miner’s shares. It commented:

We see MIN’s lithium / iron ore market exposures as an ideal combination to benefit from the China re-opening increase in demand during 1H’CY23. We also see MIN as well placed to grow into its valuation, even if we see unexpected metal price volatility, given the magnitude of organic growth in the pipeline.

Qantas Airways Limited (ASX: QAN)

A final ASX 200 share that has been added to the list is airline operator Qantas. The broker has an add rating and $8.50 price target on the flying kangaroo’s shares. It said:

QAN is now our preferred pick out of our travel stocks under coverage given it has the most near-term earnings momentum. Looking across travel companies globally, airlines are now in the sweet spot given demand is massively exceeding supply. QAN is trading at a material discount compared to pre-COVID multiples, despite having structurally higher earnings.

The post Why Morgans just added these ASX 200 shares to its best ideas list appeared first on The Motley Fool Australia.

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More reading

• Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping
• ASX 200 tech stock Megaport leaps on open then plunges on half-year results
• What’s going on with the Qantas share price today?
• These ASX 200 shares are top picks in Macquarie’s growth portfolio
• Can the BHP share price keep rising or has it peaked?

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Megaport. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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