Experts say investors should buy these ASX 200 shares

Are you wanting to add some new ASX 200 shares to your portfolio this month? If you are, read on.

Two ASX 200 shares that have been tipped as buys are listed below. Here’s what you need to know about them:

NextDC Ltd (ASX: NXT)

The first ASX 200 share to look at is data centre operator NextDC.

Citi is very positive on the company and currently has a buy rating and $12.90 price target on its shares. Based on the current NextDC share price of $9.85, this implies potential upside of 31% for investors.

The broker was pleased with the company’s performance in FY 2022 and remains positive on its outlook. Particularly given its Asian opportunity. It commented:

We see the pick-up in Enterprise/Retail bookings as positive for both yield and the potential for higher power costs to accelerate the shift to co-location datacenters. Further, while NXT has not quantified it, the increase in hyperscale options backlog underpins our medium-term earnings. However, with customer deployments being impacted by supply chain issues, we lower FY24e EBITDA by -3% and target price by -8% to $12.90 to reflect slower billing ramp.

Update on the Asian expansion represents the next catalyst, with NXT pointing to an organic build as its preferred option. With ~$1.9 billion in liquidity, we see NXT as having ample capacity to fund an organic DC build in Asia.

TechnologyOne Ltd (ASX: TNE)

Another ASX 200 share that has been tipped as a buy is enterprise software provider TechnologyOne.

A recent note out of Bell Potter reveals that its analysts have retained their buy rating and lifted their price target on the company’s shares to $14.25. With the TechnologyOne share price currently fetching $11.40, this implies potential upside of 25% for investors.

Bell Potter has suggested that TechnologyOne could lift its growth targets in the near future thanks to its strong performance and the success of its SaaS transition. It commented:

We continue to believe there is the potential for the company to lift its annual PBT growth target from 10-15% to 15-20% from next year and our forecasts are consistent with this uplift. But we also believe there is some conservatism in our FY23 and FY24 forecasts as we only forecast PBT margin improvement of c.100bps in both periods whereas we believe there is potential for the margin increase to be closer to 150bps.

The post Experts say investors should buy these ASX 200 shares appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• 2 profitable ASX tech shares analysts say are buys with 20%+ upside
• Goldman Sachs tips NextDC share price to rise 40%
• Experts name 3 ASX growth shares to buy in September
• Why Aussie Broadband, Grange, NextDC, and PolyNovo shares are being hammered

Motley Fool contributor James Mickleboro has positions in NEXTDC Limited. 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 TechnologyOne Limited. 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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