Are Wesfarmers, Xero and this ASX 200 share buys in June?

June has started with several high-quality ASX 200 shares looking interesting to me at current levels.

Wesfarmers Ltd (ASX: WES), Xero Ltd (ASX: XRO), and Aristocrat Leisure Ltd (ASX: ALL) are all very different businesses, but I think each could be worth buying this month, and I’m not alone.

Analysts from Morgans have spoken positively about all three recently. 

Wesfarmers shares

Wesfarmers is not a stock I would usually expect to look obviously cheap.

The market recognises this is a high-quality business and often prices the company accordingly. But after a weaker period for the share price, I think the valuation looks more reasonable than it did a year ago.

Morgans notes that Wesfarmers shares have fallen 9% over the past 12 months and 7% over the past six months. The broker says the stock is now trading on 26.5 times forecast FY27 earnings, compared with a peak one-year forward P/E multiple of around 37 times in August 2025.

That is still a premium valuation, but I think it is more digestible for a business of this quality.

What appeals to me is Wesfarmers’ ability to keep improving its businesses over time. This is not just about owning strong retail brands. It is about the group’s culture of discipline, cost control, operational improvement, and reinvestment.

Morgans highlights Wesfarmers’ healthy balance sheet, proven management team, and strong value propositions across its retail divisions. It also sees a possible medium-term earnings boost from better lithium prices.

The broker has recently upgraded the stock to accumulate and lifted its target price slightly to $81.10. I would go a step further and call Wesfarmers a buy for long-term investors.

Xero shares

Xero is another ASX 200 share I think looks attractive in June.

The small business software company recently delivered better-than-expected FY26 results and an FY27 outlook, according to Morgans. The broker also notes that earnings momentum continues to improve relative to consensus expectations.

I think the key attraction is that Xero is becoming more valuable to small businesses over time.

Accounting remains the foundation, but the opportunity is broader. Xero can help with invoicing, payments, payroll, tax, reporting, cash flow, and increasingly automated financial tasks.

The market has been nervous about artificial intelligence (AI) disruption. I understand that concern. AI could change how customers use software and what they are willing to pay for.

But I think Xero is better placed than many to turn AI into an advantage. If it can make its platform faster, simpler, and more useful for business owners, AI could deepen customer reliance rather than weaken it.

Morgans also points out that management was confident enough to announce a buyback and hint at potential capital management in FY28. The broker has retained its buy rating and $111 target price.

I agree with the positive view. Xero still has execution risk, particularly around the US and AI monetisation, but I think the long-term opportunity remains excellent.

Aristocrat Leisure shares

The third ASX 200 share I would buy in June is Aristocrat Leisure.

This is one of the ASX’s best global growth businesses in my view.

Aristocrat has built a powerful position in gaming content, cabinets, digital gaming, and interactive entertainment. What I like most is that its success is not built on one product cycle alone. It has a deep content engine, a global customer base, and the balance sheet strength to invest through changing conditions.

Morgans was positive on the company’s first-half result, noting that gaming was the clear standout. The broker highlighted strong outright sales, continued demand for the Baron cabinet, and solid leased additions.

There were weaker areas in Product Madness and Interactive, but Morgans still lifted its earnings per share forecasts and increased its target price to $67. It retained its buy rating.

I think financial strength is important because it gives Aristocrat the room to buy back shares, invest in content, pursue acquisitions, and continue strengthening the business.

Foolish Takeaway

What I like about this group is that the investment cases are not built on one narrow theme.

Each business has a different way to create value, and each has enough quality to remain interesting beyond June.

Morgans is positive on all three, and while I am slightly more bullish on Wesfarmers than the broker’s accumulate rating, I think the broader message is clear: these are ASX 200 shares worth considering while valuations and sentiment still look reasonable.

The post Are Wesfarmers, Xero and this ASX 200 share buys in June? appeared first on The Motley Fool Australia.

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