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The three ASX shares I’m going to mention in this article are rated as ‘buys’ by several brokers.

Broker recommendations give an indication where market analysts think there are buying opportunities for investors. Share prices change all the time, so sometimes a broker could think an ASX share is a buy at one price and perhaps a sell if it were significantly higher.

Investment site MarketIndex regularly collates the ratings of brokers together to assess what the broker community collectively think are opportunities. Just because several brokers think something is a buy doesn’t mean it’s guaranteed to do well, but it may reveal some insights.

With that in mind, here are three ASX shares that brokers like:

Nine Entertainment Co. Holdings Ltd (ASX: NEC)

Nine is rated as a buy by at least nine analysts.

The ASX share has a market capitalisation of $4.22 billion according to the ASX. It has media assets spanning television, video on demand, print, digital, and radio.

Nine’s assets include the 9 Television Network, video on demand platform 9Now, talkback radio stations like 2GB, major newspapers such as The Sydney Morning Herald, The Age and The Australian Financial Review, subscription video platform Stan, and majority investments in Domain Holdings Australia Ltd (ASX: DHG) and Future Women.

In its AGM update, Nine said that earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of FY21 is expected to be around 30% higher than the first half of FY20.

TV revenue has improved, 9Now revenue is expected to be up 25%, digital subscription revenue for its metro media is expected to be up 25%, Stan subscribers continue to grow and Domain is seeing a recovery of the Australian property market.

Nextdc Ltd (ASX: NXT)

Nextdc is rated as a buy by at least 12 analysts.

The ASX share has a market capitalisation of $5.84 billion. It provides data centres which are used by some of the biggest local and international organisations. It enables customers to source and connect with cloud platforms, service provides and vendors.

The Nextdc share price is down 8% since the announcement of the positive progress of the BioNTech – Pfizer vaccine.

However, the company continues to see growth. In FY20 it grew revenue by 14%, customer numbers increased by 15%, contracted utilisation rose by 33% and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 23%.

In FY21 it’s expecting to grow data centre service revenue by 21% to 25% and underlying EBITDA is expected to increase by 20% to 24%.  

Zip Co Ltd (ASX: Z1P)

Zip is rated as a buy by at least six analysts.

The ASX share has a market capitalisation of $3.09 billion according to the ASX. The buy now, pay later business operates both its own Zip business for the local market and it has other brands that it acquired for international markets, such as QuadPay.

Last month Zip reported its FY21 first quarter update.

It said that it achieved quarterly revenue of $71.7 million, which was growth of 88%. Its customer numbers increased by 114% to 4.5 million whilst the number of merchants increased by 69% to 34,400.

More customers and more merchants saw record quarterly transaction volume of $943.1 million, which was up 96%. This is now annualising at around $3.8 billion.

Zip said it’s now well on its way to becoming a true global buy now, pay later leader with operations across Australia, New Zealand, the United States, the UK and South Africa.

More reading

• ASX 200 down 0.35%: Ramsay Q1 update, NEXTDC’s international expansion, gold miners surge
• NEXTDC (ASX:NXT) share price edges higher on AGM update
• 5 things to watch on the ASX 200 on Friday
• Why InvoCare, Nine, Telstra, & Wesfarmers shares are storming higher
• Nine (ASX:NEC) share price surges after AGM update

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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We are now in November and rounding out a year that many of us probably wished was over a lot sooner. 2020 has proven to be a year like no other in modern history, not least due to the coronavirus pandemic. And that uniqueness extends to the world of investing. 2020 has been a year of massive volatility on share markets around the world.

Here on the ASX, 2020 has seen the S&P/ASX 200 Index (ASX: XJO) command 7,162 points, 4,546 points and 6,385 points at various times throughout the year (the latter is the level at the time of writing). So now as 2020 soon draws to a close, I’m sure there are many investors out there wondering what wonders 2021 has in store for us.

Well, one top global fund manager is very bullish on 2021, so much so that he recommends investors go ‘all in’.

That investor is Bill Ackman. According to reporting in the Australian Financial Review (AFR), Ackman is a disciple of Warren Buffett and one of the most successful fund managers in the US over the past few decades. He runs Pershing Square, a hedge fund that has done extremely well in 2020. That was partly due to a credit swap trade, which reportedly banked Pershing US$2.6 billion.

Ackman: why investors should ‘go long’ in 2021

So why is Ackman so bullish on 2021? Well, according to the AFR, it’s for a few reasons:

You’ve got low rates, you’ve got likely stimulus, you could see infrastructure spending, you’ve got still very well capitalised banks, you’ve got access to capital. So I think 2021 could be a very, very good year in markets, so go long I would say… the economy is on track for a very, very good recovery.

Ackman is also pleased with the outcome of last week’s US elections.  That saw Democrat Joe Biden elected the next US president, as well as both parties maintaining divided control of Congress: “You’ve got a more moderate Democrat in the White House, you have the kind of far left of the party that’s been neutered a bit by the results of the election”, the fund manager stated.

In terms of stocks that Ackman is finding interesting right now, he is focusing on the restaurant and hospitality sectors. That includes stocks like Chipotle Mexican Grill Inc (NYSE: CMG), Starbucks Corporation (NASDAQ: SBUX) and Hilton Hotels Corporation (NYSE: HLT).

It’s probably the single greatest time in history to open a restaurant because rents are going to be low and demand is going to be high and the supply of competition is going to be low… (A franchising restaurant) doesn’t have to spend capital to open stores because that’s done by entrepreneurs. And Hilton’s the same.

As for Starbucks, Ackman tells the AFR that “China was a tea-drinking country until Starbucks showed up”.

More reading

• ASX 200 drops 0.2% on Friday
• Fund manager says Treasury Wine (ASX:TWE) share price is too cheap
• ASX gold stocks could rebound as experts tip high highs for gold in 2021
• ASX 200 down 0.35%: Ramsay Q1 update, NEXTDC’s international expansion, gold miners surge
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen owns shares of Starbucks. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Is the Wesfarmers Ltd (ASX: WES) share price a buy for dividends?

The Motley Fool’s Everlasting Income service currently rates Wesfarmers as a buy.

What is Wesfarmers?

Wesfarmers can trace its history back over a century back to 1914 as a Western Australian farmers’ cooperative. It’s now one of the biggest businesses on the ASX.

The company has a number of different operating businesses.

There’s Bunnings, which is the country’s biggest DIY store. It sells a variety of home items and materials like timber, paint kitchens, lighting, bathrooms and plants.

Kmart Group is the next section, this includes the two large department stores of Kmart and Target.

Catch is the online-only retailer that sells a huge selection of items like food and pantry items, clothes, home and kitchen, devices, appliances, clothes, toys and furniture.

Officeworks is another segment to the business. It sells lots of different office supplies. It also sells things like computers, screens, printers and phones.

There are also two industrial divisions. Wesfarmers chemicals, energy and fertilisers (WesCEF) operates eight individual businesses in Australia.

It also has the ‘industrial and safety’ segment which operates four main businesses: Blackwoods which distributes tools, safety gear, workwear and industrial supplies. Workwear Group, which provide industrial and corporate workwear. Coregas is a supplier of industrial specialty and medical gases. Greencap is an integrated risk management and compliance company.

What has been happening recently?

Wesfarmers just announced a trading update at its AGM for the four months to 31 October 2020.

The Wesfarmers managing director Rob Scott said that the trading performance across the business had been pleasing, with the businesses responding well to a period of significant uncertainty and disruption.

Wesfarmers reported that Bunnings’ total sales grew by 25.2% with comparable sales growth of 30.9%. Comparable sales only relates to stores that were open. Online penetration was 3.8%.

Kmart total sales went up by 3.7% with comparable sales growth of 9.4%. Online penetration was 10.2%.

Target saw total sales fall by 2.2%, although there was comparable sales growth of 9.9%. Online penetration was 18%.

Catch reported that its total sales, in gross transaction value terms, went up 114.4%. Catch had 2.7 million active customers at the end of October 2020, compared to 2.3 million active customers at the end of the 2020 financial year.

Officeworks reported that total sales went up by 23.4% and the online penetration reached 39.3%.

In the financial year to date, the group’s retail businesses delivered total online sales growth was 166%, excluding Catch. Excluding online sales in metropolitan Melbourne, which were significantly elevated because of government-mandated trading restrictions, online sales growth was 98%. Including Catch, total online sales across the group increased to $1.3 billion in the year to date.

Wesfarmers also said that its industrial divisions have made a pleasing start to FY21.

In terms of Melbourne sales, Mr Scott said: “As a result of significant pent-up demand, the trading performance across stores in Melbourne has been very strong since they re-opened to retail customers on 28 October 2020.”

Is the Wesfarmers share price a buy for income?

In FY20 Wesfarmers paid $1.70 in dividends, which amounts to a trailing grossed-up dividend yield of 5%. According to Commsec estimates, the FY21 earnings per share (EPS) will be $1.85 – that means it’s valued at 26x FY21’s projected earnings.

The Motley Fool Everlasting Income service currently rates Wesfarmers as a buy. The service focuses on generating maximum, consistent, high quality, tax-effective income; while preserving capital over the long term.

More reading

• Is the Wesfarmers (ASX:WES) share price a buy?
• 5 things to watch on the ASX 200 on Friday
• The ASX 200 fell 0.5% on Thursday
• Why InvoCare, Nine, Telstra, & Wesfarmers shares are storming higher
• ASX 200 down 0.1%: Xero hits record high, Telstra and Wesfarmers updates impress

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Australia’s biggest electricity and gas retailer, AGL Energy Limited (ASX: AGL), has announced plans to offer broadband services under its own name. The move aims to take advantage of the company’s vast customer base by offering bundled packages of energy and internet services. The news came just as Telstra Corporation Ltd (ASX: TLS) is considering a foray into the energy market in a bid to boost its revenues. 

Details of AGL’s new broadband offer

AGL aims to bundle a multi-product offering that includes energy, internet, and phone services to its large customer base. The company says it will offer three unlimited data plans costing $70-$95 a month, with a $15 discount to customers who bundle them with AGL’s energy contract plans.

This is not the first time AGL has made a foray into the telecommunications sector. In 2000, the company bought phone and internet company Dingo Blue from Cable & Wireless Optus for $22 million. The business went under and was closed down just two years later. 

In 2019, AGL again ventured into telecommunications with its $27 million acquisition of Southern Phone Company, which has a 100,000-customer base. That purchase came after it abandoned an earlier bid to buy another telecommunications company, Vocus Group.  

The move by AGL is consistent with a  pattern seen in the United Kingdom and Europe where retail energy and telecommunication provides have recently ventured into each other’s territory. As an example, UK’s Shell Energy (AMS: RDSA) recently began offering ultrafast fibre broadband packages to the market. 

How has AGL share price performed in 2020?

AGL has had a disappointing performance in FY 2020, and weak guidance for the 12 months ahead. AGL Energy reported an underlying profit after tax of $816 million for FY 2020. This was a 22% decline on the prior corresponding period. For FY21, management has provided underlying profit after tax guidance of between $560 million and $660 million, much lower than its figures in FY20.

The AGL share price has lost almost 30% on a year-to-date basis.  It closed the week of trading at $12.87. At that price, the company commands a market cap of $8.16 billion.

More reading

• Brokers name 3 ASX shares to buy right now
• Why this broker is calling Telstra (ASX:TLS) shares a buy today
• These blue chip ASX dividend shares offer 5%+ yields
• The ASX 200 fell 0.5% on Thursday
• Why InvoCare, Nine, Telstra, & Wesfarmers shares are storming higher

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Australian exchange-traded funds (ETFs) that invest in Asian companies went gangbusters in October.

Local ETFs were on fire last month, breaking the industry’s all-time record for incoming money and reaching a historic-high for total funds held.

But popularity doesn’t equate to performance, so it’s interesting to see which products fared the best for its investors.

The latest Betashares report showed 3 of the top 5 performing funds in October were Asia-themed.

5 best-performing Australian ETF in October 2020 

ETF	October performance
Betashares Asia Technology Tigers ETF (ASX: ASIA)	8.3%
iShares China Large-Cap ETF AUD (ASX: IZZ)	7.2%
Vaneck Vectors Australian Banks Etf (ASX: MVB)	7.1%
Vaneck Vectors Ftse China A50 ETF (ASX: CETF)	6.6%
BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)	6.5%
Source: Betashares; Table created by author

Betashares Asia Technology Tigers ETF (ASX: ASIA) rose 8.3% for the month, on the back of a calmer COVID-19 environment compared to the western world.

The fund has gained 67% for the 12 months ending 31 October, according to Betashares head of strategy Ilan Israelstam.

“During the pandemic, Asian technology stocks have benefited both from the strong showing of Asian stocks in general, and from the outperformance of the technology sector,” he said.

“Asian economies have demonstrated a greater ability to gain control of COVID-19 outbreaks than their American and European counterparts, while technology stocks have been the leading performers around the world as the world increasingly went online as the virus took hold.”

Australian investors are buying even more Chinese stocks this month as a new US president is poised to reset a now-toxic trade relationship.

The Australian ETF industry generally had an excellent October, adding $2.3 billion of funds. This is the highest-ever monthly inflow.

Vanguard and Betashares are dominant among the suppliers, each racking up more than $4 billion of investor money this year.

More reading

• 2 tech ETFs generating big returns
• Why share markets are shrugging off this uncertainty, and what to expect next
• Elections, pandemics and rate cuts. Where to next for ASX share prices?
• These ASX growth shares could be long-term market beaters
• Where to invest $20,000 into ASX shares right now

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The S&P/ASX 200 Index (ASX:XJO) fell by 0.2% today to 6,398 points.

Here are some of the highlights from the ASX today:

Ramsay Health Care Limited (ASX: RHC)

Private hospital operator Ramsay gave an update to investors today.

The update related to the first quarter of FY21. Ramsay wanted to give investors an update in advance of its AGM on 24 November 2020.

Ramsay said that its Australian division had reported a 1.5% increase in total revenue. Excluding Victoria, total Australian revenue was up 6.6%. This reflected a 1.7% increase in surgical admissions (excluding Victoria there was growth of 8%) and lower non-surgical activity.

Ramsay reported that its Australian earnings before interest, tax, depreciation, amortisation and restructuring or rent costs (EBITDAR) declined compared to the prior corresponding period because of the impact of restrictions on activity in Victoria during the second lockdown, and the increase in costs and impact on the case mix as a result of the COVID-19 environment.

Ramsay Sante reported an increase in surgical volumes of approximately 5.4% on the prior corresponding period, combined with lower non-surgical activity.

Meanwhile, Ramsay UK reported a total revenue decline of 9.9%, in local currency terms, compared to the prior corresponding period with volumes picking up near the end of the quarter.

Both the UK and France continue to operate under the government support arrangements which currently both run until 31 December 2020.

The ASX 200 hospital company said that given near-term uncertainties in the market stemming from the COVID-19 pandemic, Ramsay is not in a position to provide guidance for FY21.

Ramsay managing director and CEO Craig McNally said: “Ramsay’s operating results continued to be impacted by the COVID-19 pandemic in the first quarter of FY21. Surgical restrictions, regional outbreaks and lower demand for some services, combined with higher costs associated with operating in the current environment have all impacted results.

“There were a number of operational lessons learned in the first wave of the virus that our hospitals have been implementing to better manage safety and capacity and where appropriate this has allowed us to continue treating private patients and public wait lists where requested.”

The Ramsay share price fell by 1.6% today. Ramsay will release its FY21 interim result on 25 February 2021.

Lovisa Holdings Ltd (ASX: LOV)

The jewellery store business announced a European acquisition today.

It announced that it would be acquiring the European retail store network of German wholesaler ‘beeline GmbH’, which is expected to add more than 80 stores to the Lovisa global store network across six European countries – Germany, Switzerland, the Netherlands, Belgium, Austria and Luxembourg with all continuing stores to be branded to trade as Lovisa stores.

The shares in the six beeline entities will be acquired for a total purchase price of sixty Euros, with beeline GmbH ensuring a cash level of the entities of €9.87 million in total. No financial debt will be taken on as a result of this transaction.

Lovisa has also entered into a put option agreement in relation to the acquisition of beeline France, including a store network of 30 stores.

The acquisition of each country’s operations is to be completed progressively from 1 March 2021 through to the end of May 2021. The combined cash requirement for fitout and inventory for the conversion of stores to Lovisa is expected to be less than €5 million.

Lovisa managing director Shane Fallscheer said: “We are very excited that this transaction gives us the opportunity to add six new countries to our global store network, and provides us with a strong base and quality team to grow the Lovisa brand further in these markets into the future as part of our ongoing global strategy.

It couldn’t provide earnings guidance for the acquisition due to COVID-19 impacts.

In terms of a trading update, 24 stores in France and 39 stores are shut because of lockdowns. For the remaining stores, comparable store sales for the first 19 weeks of FY21 were down 9.2%. Australia and New Zealand have been the best performing regions.  

The Lovisa share price went up 14.5% today. 

More reading

• Fund manager says Treasury Wine (ASX:TWE) share price is too cheap
• Why Orocobre, Ramsay, Webjet, & Xero shares are dropping lower
• ASX gold stocks could rebound as experts tip high highs for gold in 2021
• ASX 200 down 0.35%: Ramsay Q1 update, NEXTDC’s international expansion, gold miners surge
• Lovisa (ASX:LOV) share price rockets higher on European acquisition news

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The MedAdvisor Ltd (ASX: MDR) share price was a strong performer on Friday.

The medication management platform provider’s shares were up as much as 9% to 42.5 cents at one stage.

The MedAdvisor share price ultimately ended the day 6.5% higher at 41.5 cents.

Why did the MedAdvisor share price shoot higher?

Investors were buying MedAdvisor’s shares on Friday after the release of a positive announcement relating to its US activities.

According to the release, the company has extended its US digital secure messaging pilot with a major top 10 global pharmaceutical company. It will now continue through until the end of calendar year 2021.

Management advised that the program, which is a partnership with its newly acquired Adheris business, is worth US$800K (A$1.1 million) based on estimates of patient reach. Though, this is incremental to any revenue earned in 2020 from the previously announced pilot.

The partnership between Adheris and MedAdvisor was designed to bring secure digital health programs to a subset of the Adheris network. This network extends to 25,000 pharmacies and can reach 1 in 2 Americans on an opt-out basis. The company expects the program to run through up to 25% of the Adheris network.

The product, which is marketed by Adheris in the US as inMotion, sends a text message to patients on a specific and targeted drug to allow a patient to then access a secure website with important information about their medication.

The pharmaceutical company undertaking the pilot originally went live with five products and has since added a sixth product.

Adheris President and incoming MedAdvisor US President & CEO, John Ciccio, commented “We’ve set up a strong pipeline with a range of top tier pharmaceutical companies this quarter. Our integrated, digital product which was developed between Adheris and MedAdvisor is receiving positive feedback in the market with this pilot program renewing for increased scale year on year.”

More reading

• MedAdvisor Ltd (ASX:MDR) share price halted ahead of transformational $49 million acquisition

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MedAdvisor. The Motley Fool Australia has recommended MedAdvisor. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Since the Reserve Bank of Australia (RBA) cut interest rates again last week to another record low of just 0.1%, the importance of owning dividend shares for income purposes has only increased. With rates at such low levels, there are simply no real ‘safe’ alternatives anymore to a dividend if you want meaningful cash flow from your investments.

Sure, you could try a Commonwealth Bank of Australia (ASX: CBA) term deposit, but those are now going for, at most, 0.6% per annum these days. But there are some ASX dividend shares out there today that run miles around those kinds of numbers. Here are 2 such shares, both offering fully franked dividend yields of more than 5% today.

3 ASX dividend shares with a yield over 5% today

JB Hi-Fi Ltd (ASX: JBH)

You might know JB from its large yellow store banners, but this electronics and white goods retailer offers far more than that to shareholders today. JB has long moved away from its traditional product range of hi-fi equipment, DVDs, CDs and records. Today, it sells everything from televisions, phones and computers to fridges, microwave ovens and washing machines. And it’s quite good at it too, if the company’s performance numbers are anything to go by. In it’s FY2020 annual report, JB told investors that sales were up more than 11% from FY19’s numbers (including 56.6% growth in online sales) and that profits were up by more than 42%.

Those profits flowed through to a 76.5% increase in the company’s final dividend to 90 cents a share. Since JB  Hi-Fi is currently trading around $45.97 a share, that gives JB shares a trailing dividend yield of 4.11%, or 5.87% grossed-up with full franking.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is not often regarded as a top ASX dividend share. It’s instead more well-known for its fast-growing funds management business. Magellan runs a wide portfolio of managed funds, exchange-traded funds (ETFs) and Listed Investment Trusts (LITs). Some of the more popular options are the unlisted Magellan Global Fund and the Magellan High Conviction Fund, as well as the listed Magellan Global Trust (ASX: MGG). As of 30 October, Magellan has more than $103 billion in assets under management.

However, Magellan also pays a decent dividend, which has been increasing rapidly over the past few years. In 2020, the company has paid out $2.15 in dividends per share, which gives the Magellan share price a trailing dividend yield of 3.53% on current prices, or 5.04% grossed-up with the company’s full franking.

More reading

• 3 shares that have reacted adversely to vaccine news
• Best and worst ASX retail stocks to own in the COVID recovery
• JB Hi-Fi (ASX:JBH) share price sinks lower on broker downgrade
• Why Bingo, Evolution, JB Hi-Fi, & Super Retail shares are dropping lower
• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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One group of shares that are popular with investors are blue chips.

Blue chip shares tend to be companies that are well-known, long-established, and have strong financial positions. In other words, they are not going anywhere any time soon, which makes them safer than the average share.

Though, it is worth remembering that not all blue chip ASX shares are equal and some are better than others.

Two blue chips that are on form in FY 2021 are listed below. Here’s what you need to know about them:

Goodman Group (ASX: GMG)

Goodman Group is an integrated commercial and industrial property group. It has been growing at a strong rate in recent years thanks to management’s focus on high-quality properties in key locations that it believes will deliver sustainable returns for investors. These include logistics and warehouse facilities which have exposure to the growing ecommerce market through relationships with Amazon, DHL, and Walmart.

At the end of the first quarter of FY 2021, the company reported 2.9% like-for-like net property income growth across its managed partnerships. It also revealed 97.8% occupancy across its partnerships and $7.3 billion of development work in progress. The latter was ahead of its guidance.

This update went down well with analysts at Morgan Stanley. They have retained their overweight rating and $20.90 price target on the company’s shares. It notes that Goodman is expecting more developments over the remainder of FY 2021, with higher yields.

Sonic Healthcare Limited (ASX: SHL)

Sonic Healthcare is a blue chip share in form. It recently released its first quarter update and revealed very strong revenue and earnings growth. For the three months ended 30 September, the company delivered a 29% increase in revenue to $2,144 million and a massive 71% lift in EBITDA to $580 million. The majority of this strong growth was driven by increasing demand for COVID-19 testing services globally. Though, it is worth noting that the rest of the business performed positively as well.

This was another update that went down well with Morgan Stanley. In response to the update, it retained its overweight rating and lifted its price target to $40.00. The broker believes that its earnings from COVID-19 testing could remain stronger for longer. It suspects this could lead to a sustained re-rating of its shares.

More reading

• Leading brokers name 3 ASX shares to sell today
• Is the Goodman Group (ASX: GMG) share price the best REIT of 2020?
• Goodman (ASX:GMG) share price trading higher after quarterly results
• Why Flight Centre, Goodman, Inghams, & Scentre shares are charging higher
• With interest rates near zero these ASX income shares are in focus

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Aristocrat Leisure Limited (ASX: ALL) share price will be on watch next week when the gaming technology company releases its full year results on Wednesday.

Ahead of the release, I thought I would take a look to see what the market was expecting from Aristocrat Leisure in FY 2020.

What is the market expecting?

Aristocrat Leisure is widely expected to report a sharp decline in revenue and profits in FY 2020 due to the impact of COVID-19.

According to a note out of Goldman Sachs, its analysts are forecasting revenue of $3.94 billion and net profit after tax before amortisation of $471 million. This represents a 10% and 47% decline, respectively, over the prior corresponding period.

What about its different segments?

The broker expects the company’s Digital business to have performed exceptionally well in FY 2020. It is forecasting a 27% increase in revenue to $2,273 million.

Goldman commented: “SensorTower continues to point to a solid 2H20E performance across the digital front, and to this end we forecast digital revenue growth of 27% on pcp in 2H/FY20E. We also highlight recent solid trends reported across the Sep quarter by peers such as ZYNGA. Through the half, we note that digital revenues (in USD) were up 36% on pcp on a 6mo rolling basis, driven by Product Madness up 45% and Plarium up 41%.”

The key drag on its performance is expected to be its Land based business. Goldman Sachs is forecasting a 36% decline in revenue to $1,667 million due to COVID-19 casino closures and social distancing initiatives.

While this is disappointing, the broker believes Aristocrat Leisure is well-placed to win market share post-pandemic.

The broker explained: ”While land based revenues will clearly be heavily impacted in 2H20E given the pandemic, we remain of the view that ALL is well-placed to take further share noting its solid balance sheet and recent industry surveys suggesting that it holds 2/3 of the top 5 performing cabinets across key categories.”

What else should you be watching?

The broker revealed that it remains bullish on its Digital business and will be looking out for commentary on the performance of its RAID game and its outlook into FY 2021.

It is also looking for comments around the growth trajectory of its new game, EverMerge. It notes that this has been the second most downloaded game in October.

Goldman will also be focused on the company’s expectations around outright sales and product development into FY 2021 and the shape of land based recovery.

Outlook.

Goldman Sachs isn’t expecting management to provide any real guidance for FY 2021, but there are a few points it is hoping will be clarified.

The broker concluded: “While we believe management will unlikely be able to provide any quantified FY21E group guidance given the fluid nature of the COVID-19 impacts, we will be particularly interested in i) commentary around the speed at which land based revenues can recover in N/A, ii) cost and D&D outlook noting that recently management reiterated their focus on continuing to invest in D&D over the medium term, and iii) any incremental snippets around M&A and desire to step into iGaming.”

Goldman Sachs has a buy rating and $34.00 price target on the company’s shares.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post What to expect from the Aristocrat Leisure (ASX:ALL) FY 2020 results appeared first on Motley Fool Australia.

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