There are a lot of ASX 200 shares for investors to choose from. This can make it hard to decide which ones to buy above others.
But don't worry because the team at Morgans has done a lot of the hard work and picked out its best ideas for the month.
Two that are on the list this month are listed below. Here's why the broker is feeling bullish about them:
Image source: Getty Images
NextDC Ltd (ASX: NXT)
NEXTDC is a technology company enabling business transformation through innovative data centre outsourcing solutions, connectivity services, and infrastructure management software.
Morgans thinks the company would be a great option for investors thanks to structural demand and its growing footprint. The broker explains:
NXT should deliver another good set of results in FY24 with some upside risk to guidance, in our view. Structural demand for cloud and colocation remains incredibly strong. NXT's new S3 and M3 data centres are now open. Consequently, we expect significant new customer wins over the next six-to-twelve months (including CSP options being exercised). Sales should drive the share price higher. NXT looks comfortably on-track to generate over $300m of EBITDA in the next three to five years.
Morgans has an add rating and a $20.00 price target on the company's shares.
Pilbara Minerals Ltd (ASX: PLS)
Another ASX 200 share that Morgans has on its best ideas list is Pilbara Minerals. It is one of the world's largest lithium miners and the owner of the Pilgangoora project in Western Australia.
The broker notes that lithium prices have been weak, but it doesn't expect this to remain the case for long. In light of this, the broker supports management's strategy of increasing production through the cycle. It explains:
We view PLS as a fundamentally strong and globally significant hard-rock lithium miner. The company has successfully executed on ramping up the expansion of Pilgangoora, while progressing plans to expand output (P680 and P1000). Supported by a strong balance sheet, with net cash at ~A$2.1bn at the end of December, PLS' expansion plans remain uniquely undeterred by the significant weakness in lithium prices. For PLS, the best form of defence against lithium prices is to stay on the attack, with its medium-term plans to continue expanding its production aimed primarily at building greater economies of scale and a more defensive margin.
Morgans currently has an add rating and a $4.30 price target on the lithium giant's shares.
