If you're looking for top ASX 200 stocks that are showing strong momentum, experts say that ResMed Inc (ASX: RMD) and Telstra Group Ltd (ASX: TLS) should be on your radar.
Both companies have been performing exceptionally well and show no signs of slowing down. ResMed shares are up 19% since July, whereas Telstra has gained 10%.
Let's dive into why the experts say these ASX 200 stocks might be worth considering for your portfolio right now.
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ASX 200 stocks in favour
Healthcare player ResMed has excelled in 2024, with investors bidding up its stock price by more than 34% since January.
Analysts expect more growth ahead.
Morgans' analysts have ResMed on the broker's best ideas list with a buy rating and a price target of $35.93. This implies a 5% upside at the current price.
Despite the buzz around weight loss drugs potentially affecting the sleep disorder market, Morgans believes ResMed is well-positioned for long-term growth.
It argues that these drugs will have little impact on ResMed's large, underserved sleep disorder breathing market.
ResMed's Q4 FY24 results were also strong, with a 9% increase in revenue to US$1.2 billion. The company's gross margin improved by 350 basis points, leading to earnings per share (EPS) of US$1.98.
Consensus also rates the ASX 200 stock a buy, according to CommSec.
Telstra: Reliable dividends with growth
The second of our ASX 200 stocks is Telstra, Australia's largest telecommunications company. It's been delivering solid returns for investors these past few weeks.
The ASX 200 stock has rallied from lows of $3.42 apiece on May 22, reaching six-month highs of $$3.96 by Tuesday's close.
Morgan Stanley recently retained its buy rating on Telstra, lifting its price target on the telco to $4.40 per share.
The broker was pleased with Telstra's full-year results, which were in line with expectations, and noted the company's improved guidance for FY 2025.
My view is that Telstra is also benefiting from its strong mobile business and improving NBN margins.
Meanwhile, Goldman Sachs has also reiterated its buy rating with a price target of $4.35.
The broker highlighted Telstra's ability to support a dividend increase to 19 cents per share in FY25, backed by free cash flows across FY24-27:
We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive.
We also believe that Telstra has a meaningful medium term opportunity to crystallise value through commencing the process to monetise its InfraCo Fixed assets — which we estimate could be worth between A$22-33bn.
Foolish takeaway
Both ResMed and Telstra are showing strong signs of growth and are well-positioned to continue delivering solid returns. Experts are bullish on their investment prospects.
For those looking to add quality ASX 200 stocks to their portfolio, these two companies might be worth a closer look.
