Leading broker names 4 ASX shares that could upgrade their earnings guidance

Qantas Airways Limited (ASX:QAN) is one of four companies that Goldman Sachs thinks could upgrade earnings guidance next month…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Earlier today I revealed three shares that Goldman Sachs had tipped to provide the market with a disappointing full-year guidance update in May.

While those three shares could carry some downside risk as we move into May, four other shares that the broker thinks could have upside risk next month are listed below.

Here's why Goldman Sachs thinks they could be about to upgrade their earnings guidance:

Bingo Industries Ltd (ASX: BIN)

According to the note, Goldman thinks that this waste management company's strong first-half performance, price rises introduced in the second-half, contributions from acquisitions, strong demand from building and demolition customers, and new contract wins could lead to a stronger than expected result. I would agree with Goldman on this one and think Bingo would be a great investment.

Bravura Solutions Ltd (ASX: BVS)

Although Bravura's guidance for underlying EPS growth in the high-teens is in-line with Goldman's forecasts, it believes there is a chance it could outperform. This is due to a strong pipeline of work from existing customers, new client wins, and operating leverage. An earnings beat would be great, but even if it only achieves its guidance I think Bravura's shares are great value.

Lifestyle Communities Limited (ASX: LIC)

Due to potentially stronger settlements than the market is expecting, Goldman thinks that this retirement living provider could surprise to the upside. Goldman has estimated 300 settlements in FY 2018, compared to the company's upgraded guidance of 285 to 315. I like Lifestyle Communities for its exposure to Australia's ageing population, so it could be worth considering given this upside risk.

Qantas Airways Limited (ASX: QAN)

Goldman notes that historically Qantas provides its profit before tax guidance when it releases its third-quarter trading update. The airline is due to announce its third-quarter update on Wednesday with the market (and Goldman Sachs) expecting a figure of $1,550 million. However, the broker sees potential upside to its earnings due to strong year-to-date aviation statistics for the domestic market. strong forward bookings for the Dreamliner launch, a lull in oil prices, and the benefits of its Singapore Hub strategy. As long as oil prices don't spiral out of control, I think Qantas could be a good investment.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Bravura Solutions Ltd. 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.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »