Are you interested in adding some ASX growth shares to your portfolio? If you are, you may want to look at the share listed below that Goldman Sachs has on its conviction list.

Here’s what you need to know about this buy-rated growth share:

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster could be an ASX growth share to buy. It is Australia’s leading online furniture and homewares retailer through the eponymous Temple & Webster website. It is also developing an online Bunnings competitor known as The Build.

While it is unlikely that Bunnings will be quaking in its boots over The Build, the bricks and mortar furniture and homewares market may be nervous about the prospect of losing market share to Temple & Webster in the future.

Goldman Sachs is very positive on the company’s future and believes post-results weakness has created a buying opportunity for investors. It commented:

We think the negative share price reaction (-27%) is overdone, in response to a weaker than expected trading update for the first five weeks of the year which we view as largely reflecting the lapping of omicron rather than a deterioration in underlying trends. We view the balance towards profitability as a sensible shift given near term uncertainty; that said we expect the business to pivot back to active customer growth in FY24 which should drive market share gains.

Post today’s sell off, we believe the market is either pricing in i) a significant downturn with TPW trading at a bottom of the cycle EV/GP multiple (2.1x FY24E vs. W trading on 2.5x); or ii) a very material impairment to its long term growth opportunity, which we saw no evidence of in the update today.

Goldman has conviction buy rating and $6.50 price target on its shares. Based on the current Temple & Webster share price of $3.53, this implies potential upside of 84% over the next 12 months.

The post This ASX growth share has a massive 84% upside: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

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• Are Temple & Webster shares a bargain buy following Tuesday’s 27% fall?
• Buy these beaten down ASX shares now: experts
• Why Ansell, Breville, Star, and Temple & Webster shares are falling

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 positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Coles Group Ltd (ASX: COL)

According to a note out of Citi, its analysts have retained their buy rating on this supermarket giant’s shares with an improved price target of $20.20. Citi was impressed with Coles’ first-half result, noting that it came in comfortably ahead of its expectations. Looking ahead, the broker believes shopping trends are favourable for Coles. It also feels the market is being too negative on the Ocado partnership. The Coles share price ended the week at $18.08.

IDP Education Ltd (ASX: IEL)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this language testing and student placement company’s shares with a trimmed price target of $35.70. Although IDP’s half-year earnings were a touch below expectations, Goldman was impressed with its revenue growth and operating leverage. The broker expects this trend to continue and is forecasting double-digit revenue growth and further margin expansion through to at least FY 2025. The IDP share price was fetching $29.11 at Friday’s close.

Qantas Airways Limited (ASX: QAN)

Analysts at Morgans have retained their add rating on this airline operator’s shares with a slightly reduced price target of $8.35. This follows the release of a strong half-year result which revealed earnings at the top end of its guidance range. Morgans was perplexed by the market’s poor reaction to the result, particularly given the prospect of strong travel demand continuing well into FY 2024. In light of this, it believes a buying opportunity has arrived for investors. The Qantas share price ended the week at $6.16.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Buy these ASX 200 shares following their results: Goldman Sachs
• 7 ASX 200 shares with ex-dividend dates next week
• Is Wesfarmers looking to sell off its remaining Coles shares?
• Own Woolworths shares? Supermarket giant moves to team up with Coles on recycling blitz
• Should I buy the dip on Qantas shares?

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 positions in and has recommended Idp Education. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Idp Education. 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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This S&P/ASX 200 Index (ASX: XJO) healthcare share could be a very effective choice for passive income. I’m talking about Sonic Healthcare Ltd (ASX: SHL) shares.

The laboratory services, pathology, and radiology provider has been very effective at growing its scale, earnings, and dividend over the last two decades.

At one time, it did not have the international reach that it does now. The ASX healthcare share is now a global business with a market capitalisation that’s approaching $16 billion. It operates in a number of countries including Australia, New Zealand, Germany, the US, and the UK.

And its business could continue to grow for a very long time thanks to its exposure to tailwinds like ageing demographics and new technology for pathology.

Higher earnings have helped the Sonic Healthcare share price over the last five years — it’s up by around 40%. Sonic Healthcare got a pandemic-era boost as it carried out millions of COVID tests. But now the focus is back on its core business.

How to make $200 of weekly income from Sonic Healthcare shares

There are no ASX 200 stocks that pay weekly. I think it’s better to think of a company’s dividend as an annual income that can be divided by 52.

To make $200 of weekly income, we need to generate $10,400 of annual income.

In FY23, according to Commsec, Sonic Healthcare is forecast to pay an annual dividend per share of $1.01, not including the effect of franking credits. That’s a cash dividend yield of 3%.

If we owned 10,298 Sonic Healthcare shares, then we’d receive $10,400 of annual passive income in cash dividends. The franking credits would be a bonus on top of that.

The current Commsec forecasts for Sonic Healthcare suggest that the dividend could be increased to $1.06 per share in FY24. At the current Sonic Healthcare share price, that suggests the ASX stock could pay an FY24 cash dividend yield of 3.2%.

There could be another dividend increase in FY25. Commsec numbers currently predict a dividend per share of $1.115. That’s a possible forward cash dividend yield of 3.35%.

If we think about FY25’s payout, investors would only need to own 9,327 Sonic Healthcare shares to get $10,400 of annual dividends.

How is the ASX 200 stock performing?

The latest update that investors have seen was the company’s FY23 first-half update.

While the drop-off in COVID testing was the cause of total revenue falling 14% and net profit after tax (NPAT) sinking 54%, the company has made a lot of progress since the first half of FY20 – a time when COVID-19 was not impacting Sonic’s key markets.

Compared to HY20, base business revenue was up 11% (with organic revenue growth of 8%) and total revenue was up 22% thanks to residual COVID testing in FY23. Earnings before interest, tax, depreciation and amortisation (EBITDA) was up 33% and net profit was up 50%.

The HY23 result saw Sonic Healthcare increase its interim dividend by 5% as it continued its progressive dividend policy for shareholders.

Sonic Healthcare continues to win contracts. It’s also considering “several acquisition opportunities, with a rich pipeline” and it is benefiting from post-pandemic catch-up testing.

The post For $200 in weekly passive income, buy 10,300 shares of this ASX 200 stock appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Tristan Harrison 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 recommended Sonic Healthcare. 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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In recent years, with interest rates at record low levels, term deposits have been out of favour with investors and ASX shares have ruled the roost.

However, with rates now rising, demand for term deposits has been increasing.

And while term deposits are certainly great for those that are risk averse, the potential returns on offer from ASX shares arguably make them the better option for income investors.

For example, Commonwealth Bank of Australia (ASX: CBA) is currently offering 4% per annum on 12-month term deposits. Whereas the share market has historically provided investors with a 10% per annum return.

Furthermore, the share market provides a combination of potential income and capital gains through dividend shares, which is something that term deposits cannot offer.

But which ASX dividend shares would be good alternatives to term deposits? Listed below are two shares that analysts believe offer the winning combination of income and capital gains in spates.

Telstra Group Ltd (ASX: TLS)

A note out of Morgans reveals that its analysts are expecting a 17 cents per share fully franked dividend from this telco giant in FY 2023.

While this equates to a fully franked yield only marginally better than a term deposit at 4.1%, the broker also sees plenty of upside for its shares with its add rating and $4.70 price target.

So, with this ASX share currently fetching $4.18, this suggests it could rise 12.5%, which brings the total potential 12-month return to 16.6%. This is more than quadruple the return on offer with term deposits.

Westpac Banking Corp (ASX: WBC)

According to a note out of Goldman Sachs, its analysts have a conviction buy rating and $27.74 price target of this banking giant’s shares. Based on the latest Westpac share price of $22.67, this implies potential upside of 22% for investors over the next 12 months.

In addition, Goldman expects fully franked dividends of 147 cents per share in FY 2023 and then 156 cents per share in FY 2024. The former equates to a 6.5% yield, which brings the total potential return to 28.5%.

That’s 24.5% greater than the return you would get buying a term deposit.

The post Forget term deposits and buy these ASX shares appeared first on The Motley Fool Australia.

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More reading

• 3 steps to bring in $1,000 per month in passive income
• 7 ASX 200 shares with ex-dividend dates next week
• Morgans names 2 ASX 50 shares to buy now
• Why is Macquarie so bullish on Telstra shares?
• 3 ASX 200 dividend shares to buy now before their dividend payouts

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Westpac Banking. 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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