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.
