Brokers have picked out some leading S&P/ASX 200 Index (ASX: XJO) shares that they have rated as buys.
These analysts are looking at the share market every day, so they typically have expertise on the businesses they're following and hopefully have chosen a good time to call that business a buy.
The Australian has reported on some of the latest calls.
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Blackmores Ltd (ASX: BKL)
The broker Citi raised its target on the vitamins business to a buy. Citi's price target on the business is $84. A price target is where the broker sees the Blackmores share price trading in 12 months time.
With a price target of $84, that suggests that Blackmores doesn't have any upside from here.
The company is due to hand in its FY23 half-year result on 23 February 2023. The latest update we heard was in October 2022 when the company held its annual general meeting (AGM).
It said that it had seen a solid start to FY23, with supply chain stabilising, and service levels to customers improving to the best in the previous three years.
In Australia and New Zealand, it implemented price increases in the FY23 first quarter of between 5% to 6% to absorb cost inflation pressures. Blackmores' total market share value growth in ANZ is in line with the category.
In the international market, the ASX 200 share confirmed it's expecting revenue in the FY23 first half to be lower than the first half of FY22. It implemented price increases of 7% to 8% in the FY23 first quarter.
In the China region, Blackmores said it's seeing good momentum in premium fish oil and eye care segments, with the performance of new product launches being "encouraging". Blackmores implemented price increases across e-commerce platforms of between 6% to 8% in the FY23 first quarter.
Sims Ltd (ASX: SGM)
The broker UBS has significantly raised its price target on Sims to $16. That suggests a possible rise of close to 9% over the next year.
Sims describes itself as a global leader in metal recycling and providing "circular solutions for technology, and an emerging leader in renewable energy." The business has operations in a number of places including the UK, Europe, North America, Africa and the Asia Pacific region.
The latest update from Sims was at its annual general meeting (AGM). It said that soft market conditions have persisted through the first quarter of FY23, driven by lower volumes, tighter margins and "resiliently high" inflation.
The ASX 200 share said that lower scrap volumes resulting from significantly reduced economic activity, combined with increased competition for available infeed, has tightened trading margins in both percentage and dollar per tonne terms.
Sims' underlying earnings before interest and tax (EBIT) for the FY23 first half is forecast to be in the range of between $65 million to $75 million.
Johns Lyng Group Ltd (ASX: JLG)
The newspaper also reported that Citi has rated Johns Lyng as a buy, with a price target of $8.77. That suggests a possible rise of over 50% in the next 12 months.
This ASX 200 share is a building services business that provides building and restoration services across Australia and the US. The key role that it performs is that it rebuilds and restores properties and contents after damage from insured events such as impact, weather and fire events.
The Johns Lyng share price has dropped close to 40% since April 2022, giving it a lot of room to rebound.
While weather events are terrible for the communities it impacts, it gives the business more opportunity to provide its services. For example, at the AGM in November 2022, it said that Hurricane Ian in the US alone was an event that could cost more than US$60 billion.
The ASX 200 share has forecast that FY23 group revenue will be $1.03 billion with business as usual (BaU) work accounting for $930.4 million – a rise of 27.4% compared to FY22.
The earnings before interest, tax, depreciation and amortisation (EBITDA) forecast is $105.3 million, representing a growth of 26% compared to FY22. The BaU EBITDA forecast is $93 million, a 43.3% increase over FY22.
