There are plenty of blue chip ASX shares to choose from on the Australian share market.
But which ones could offer strong returns over the next 12 months?
Let's take a look at two popular options and see what could be on offer with their shares:
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Endeavour Group Ltd (ASX: EDV)
Over at Goldman Sachs, its analysts think investors should be snapping up this drinks giant's shares while they are down. Endeavour is the owner of BWS and Dan Murphy's, as well as a large network of hotels across the country.
The broker believes that Endeavour's shares are cheap based on its positive growth outlook and market leadership position. It commented:
Our Buy thesis on the stock is based on the following key drivers: 1) Market share gain (already 40% market share) in defensive alcohol retail from consumer data and loyalty advantages; 2) Organic reopening beneficiary with its hotels/pubs business back to pre-COVID sales/property. We believe EDV is trading at a relatively attractive valuation, with potential downside from EGM tax changes already fully priced in. We are Buy rated (on CL) on EDV.
Its analysts have a buy rating and a $6.40 price target on its shares. This suggests a potential upside of 23% for investors. The broker is also forecasting a fully franked 4.1% dividend yield in FY 2024.
REA Group Limited (ASX: REA)
Goldman Sachs' analysts also believe that REA Group is a blue chip ASX share to buy. It is the company behind the realestate.com.au website and several complementary businesses.
Goldman believes that REA Group is one of the highest-quality businesses that Australia has to offer. It also sees plenty of growth opportunities ahead. It explains:
We believe REA is among the highest-quality names in our coverage, given it has the highest ability to continue to drive pricing, with: (1) significant disparity between lead share and revenue share; (2) the lowest cost relative to overall transaction; (3) a profitable and still fragmented end market; and (4) the existence of Vendor Paid advertising, with strong valuation support with current trading multiples well below historical levels.
Goldman has a buy rating and a $179 price target on its shares. This implies a potential upside of over 11% for investors.
