Late last month Goldman Sachs hosted a total of 24 companies over three days at its 12th Annual Emerging Leaders Conference. Among the many small and mid cap ASX shares presenting were a few that Goldman Sachs is particularly bullish on.
Listed below are five emerging ASX shares that Goldman has buy ratings on at present:
Image source: Getty Images
Elders Ltd (ASX: ELD)
Goldman Sachs is a fan of this agribusiness company and currently has a conviction buy rating and $15.00 price target on its shares.
It commented: "Our positive thesis is predicated on a strong track record, favourable industry structure, the potential for a positive earnings surprise, and attractive value. The key long-term earnings drivers for ELD revolve around its proprietary product backward integration (increasing margins) and market share (organic and acquisition driven) strategies. In the short term current weather conditions are supportive for the upcoming winter crop and should boost demand for ELD's products and services."
Hipages Group Holdings Ltd (ASX: HPG)
This online tradie platform provider's shares could be cheap according to Goldman Sachs. Its analysts have a buy rating and lofty $3.35 price target on its shares.
It commented: "We see HPG as an attractive medium-term growth stock – HPG currently captures c.5% of the total industry advertising spend; by contrast REA/CAR capture c.40-60% of spending in their respective categories. As HPG builds out its ecosystem (including the imminent launch of the new "TradieCore" field service software solution), we see scope for HPG to increase its share towards these levels over the long term as the marketplace leader."
HUB24 Ltd (ASX: HUB)
Goldman is bullish on this investment platform provider and expects its strong fund inflows to continue for some time. Its analysts have a buy rating and $26.83 price target on its shares.
It explained: "We see solid earnings momentum for HUB where we expect custody flows of c. A$1.5bn/A$8.2bn/A$9.0bn in 4Q21E/FY22E/FY23E, which leaves us at the top-end of HUB's guidance for platform FUA between A$43bn-A$49bn by FY22. We also like that adviser numbers have continued to increase steadily, and the opportunity for pipeline growth within the business. We see upside opportunity with the IFL private label solution, and the CVW transition as the white label solution continues to add new flows. We also see potential as the IT solution that HUB will provide to EAS will be rolled out in 4Q21, and as the PARS business separation from Ord Minnett progresses."
Lifestyle Communities Limited (ASX: LIC)
Another ASX share that is on Goldman's conviction list is Lifestyle Communities. The broker has a conviction buy rating and $15.95 price target on its shares.
Goldman commented: "We see the stock outperforming, driven by: (1) long-term structural growth, with demand for land-lease from a growing cohort of over 50s freeing up equity from the family home; (2) supportive property market dynamics which should support a significant increase in settlements and; (3) rising land lease asset valuations driven by cap rate compression which we think will come from the maturing of this low risk, annuity income stream. Residential land lease communities (RLLCs) are emerging as an institutional-grade property sub-sector with increasing demand in the space from offshore investors."
PointsBet Holdings Ltd (ASX: PBH)
Goldman Sachs is a big fan of this sports betting company and believes it has a huge opportunity in the United States. The broker has a buy rating and $17.20 price target on its shares.
"We like PBH due to i) PBH's leverage to the burgeoning US Sports Betting and iGaming market which we forecast to be a US$53 bn TAM opportunity at maturity, ii) our view that PBH is well-placed to achieve 10% share in states it operates in, iii) upside risk to long-run sustainable margins in Aus and the US which was reaffirmed by the strong margin result in 3Q21, iv) Scalability benefits ahead noting positive impacts from the NBCUniversal deal to come and imminent launch of iGaming (which we believe will provide both cost and revenue synergies), and v) strong management team and execution track record," it explained.
