Ord Minnett names 2 ASX 200 shares to accumulate with 10% and 20% upside

The team at Ord Minnett has been busy running the rule over a number of ASX 200 shares.

Two that have been given accumulate ratings and price targets offering plenty of upside are named below. Here’s what you need to know:

Tabcorp Holdings Ltd (ASX: TAH)

Ord Minnett was pleased with this gambling company’s half-year results, highlighting that its EBITDA was “comfortably ahead of market and Ord Minnett expectations.”

It notes that this was spurred by “strong revenue growth and lower-than-forecast operating costs that drove wider earnings margins than anticipated.”

In response, the broker has put an accumulate rating and $1.17 price target on its shares. Based on its current share price, this implies potential upside of approximately 22%.

Commenting on the ASX 200 share, the broker said:

The tight rein on costs positions has provided Tabcorp with plenty of operational leverage, and we now model a 3% increase in EBITDA for every 1% increase in wagering revenue. Post the result, we have cut our EPS estimates by 3.6%, 6.3% and 8.2% for FY26, FY27 and FY28, respectively.

We highlight the scale of these changes are exaggerated by the law of small numbers, with our forecasts still implying a compound annual growth rate (CAGR) in EPS of more than 20% over the forecast horizon. ‍ We raise our target price on Tabcorp to $1.17 from $1.02, while we trim our recommendation to Accumulate from Buy on valuation grounds.

Woolworths Group Ltd (ASX: WOW)

Another ASX 200 share that Ord Minnett has been looking at is supermarket giant Woolworths.

Like Tabcorp, it delivered a result that was stronger than expected during the first half. It notes that Woolworths’ “earnings and an interim dividend [were] ahead of Ord Minnett and market expectations and lifted guidance for full-year earnings growth from its dominant Australian food business.”

Ord Minnett responded by putting an accumulate rating and $39.00 price target on its shares. Based on the current Woolworths share price, this implies potential upside of 10% for investors over the next 12 months.

The broker commented:

Group cost control over the period impressed – growth in operating expenses was just 2% in the half, down from the mid-to-high single-digit rates seen in recent years. Post the result, we have raised our EPS estimates by 6.3%, 5.1% and 6.1% for FY26, FY27 and FY28, respectively, to incorporate actuals and our view that Woolworths will maintain its market share versus arch-rival Coles (COL), which has made the running for several years now. This outlook leads us to raise our target price on Woolworths to $39.00 from $33.00, although valuation means we trim our recommendation to Accumulate from Buy.

The post Ord Minnett names 2 ASX 200 shares to accumulate with 10% and 20% upside appeared first on The Motley Fool Australia.

More reading

• How I’d start building an ASX retirement portfolio today
• 3 excellent ASX shares I’d happily hold through the next market cycle
• Rotating into defensive stocks? 3 ASX companies to consider
• US$100 oil is a big deal for every ASX share. Here’s why
• What I’d buy if the ASX share market crashes

Motley Fool contributor James Mickleboro has positions in Woolworths Group. 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 Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.