2 high-quality ASX 200 shares experts rate as buys

These two ASX blue chips are rated as buys by brokers.

| More on:
Increasing stack of blue chips with a rising red arrow.

Image source: Getty Images

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

Key points

  • These two ASX 200 shares are rated as buys by experts 
  • Goodman is a global industrial property owner and developer 
  • Wesfarmers is a diversified company, which owns businesses like Bunnings and Officeworks 

The Australian Stock Exchange has a number of high-quality S&P/ASX 200 Index (ASX: XJO) shares within its ranks. Experts have named some of them as buys.

ASX 200 shares are large enough that some of them are the biggest in their sector in Australia.

These two ASX 200 blue-chip shares are liked by leading brokers:

Goodman Group (ASX: GMG)

Goodman describes itself as an integrated property group – it owns, develops and manages property.

The business has a global portfolio of industrial properties and projects. Its total assets under management (AUM) was $68.2 billion at 31 December 2021.

Looking at the rental side of the business, the portfolio occupancy was "high" at 98.4% and like for like net property income growth was 3.4% in the FY22 half-year result.

It also has a large amount of development work in progress (WIP). In HY22, the WIP was $12.7 billion across 81 projects with a forecast yield on cost of 6.7%.

Goodman says that its strategy of providing essential infrastructure for the digital economy is "delivering" and it's performing "strongly" across all segments. The ASX 200 blue-chip share says that the operating outlook for the business is "strong".

Due to the level of the performance, Goodman recently upgraded its market guidance for FY22 with operating earnings per security (EPS) growth projected to be 20%.

It's currently rated as a buy by the broker Morgan Stanley, with a price target of $27.88. That implies a potential upside of almost 20% over the next year.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a diverse ASX 200 blue-chip share, though most of its earnings come from its retail operations. The retail businesses it owns include Bunnings, Kmart, Target, Officeworks and Catch.

In the six months to December 2021, over two thirds of Wesfarmers' earnings before tax (excluding significant items) came from Bunnings. However, there are multiple businesses within the Bunnings division that can help longer-term earnings including Tool Kit Depot and Beaumont Tiles.

At the moment, growth has slowed for the retail businesses after the COVID boom. However, the ASX 200 blue-chip share is looking to other industries to expand and diversify the business.

Management said with Wesfarmers' FY22 half-year result that it is delivering good progress on the construction of the Mt Holland lithium project. It has also acquired the Australian Pharmaceutical Industries business which will be the start of a health, wellbeing and beauty segment.

Wesfarmers has told investors of the difficulties that its supply chain is facing, but the company's retail businesses will continue to focus on price leadership for customers.

It's currently rated as a buy by the broker Morgans. The price target is $58.50, suggesting potential upside of almost 20% over the next year. Morgans' projections suggest that the Wesfarmers share price is valued at 22 times the estimated earnings for FY23.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Blue Chip Shares

A business woman flexes her muscles overlooking a city scape below.
Blue Chip Shares

Brokers name 2 strong ASX 200 shares to buy now

These shares are among the top picks on the benchmark ASX 200 index according to analysts.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Blue Chip Shares

Up 47% in a year: This blue chip ASX 200 stock can keep rising

Bell Potter is feeling bullish about this stock. But why?

Read more »

A man looking at his laptop and thinking.
Blue Chip Shares

Should you buy Coles and Mineral Resources shares this month?

Are these blue chips buys? Let's see what Bell Potter is saying about them.

Read more »

Happy man working on his laptop.
Blue Chip Shares

These big ASX 200 blue chip shares could rise 20% to 50%

Analysts think these blue chips could be cheap at current levels.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Blue Chip Shares

Why this ASX 200 share is one of the 'highest-quality names'

Goldman Sachs is a huge fan of this blue chip. But why?

Read more »

A fit man flexes his muscles, indicating a positive share price movement on the ASX market
Blue Chip Shares

4 ASX 200 blue chip shares to buy for a strong portfolio

Looking for strong shares to buy? Here are four that analysts rate as buys.

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Blue Chip Shares

2 ASX shares I think are a safe buy in October

Analysts think these strong blue chip shares are top buys for investors right now.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Blue Chip Shares

Top Australian stocks to buy with $3,000 right now

Brokers think these shares would be great destinations for an investment.

Read more »