If you're wanting to pick up some blue chip shares, then the two listed below could be top options.
Both of these ASX 200 blue chips have been rated as buys by brokers recently. Here's what they are saying:
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Woolworths Group Ltd (ASX: WOW)
The first ASX 200 blue chip share that could be in the buy zone is retail giant Woolworths.
Analysts at Goldman Sachs are feeling very positive about the company even in the current environment. In fact, the broker is forecasting solid sales growth and even stronger earnings growth through to FY 2024.
Goldman explained:
We are encouraged by the resilience and superior operations of WOW and reiterate our unchanged FY22-24e Sales and EPS CAGR of 6.9% and 14.9% respectively. We expect this to be driven by high price growth, well protected GPM and slight EBIT margin expansion as COVID costs roll-off and cost efficiencies continue.
Goldman recently reiterated its buy rating and $41.70 price target on the company's shares.
Xero Limited (ASX: XRO)
Another blue chip share that could be in the buy zone is cloud accounting platform provider Xero.
The team at Morgans is positive on Xero. Its analysts believe the software company has high quality operations and strong growth potential in an industry with high barriers to entry.
The broker explained:
XRO boasts strong customer advocacy, significant barriers to entry, scalability and LTV at ~7x CAC. It should continue to grow earnings/FCF above economic trend and is profitable and liquid. We rate it highly and it appears others do as well. A key risk is XRO trades on large short-term multiples. If we remove FY22F "investing for growth" CAC, XRO trades on a ~2.2% FCF yield. Rising interest rates are a net negative for XRO's share price and growth companies. However, XRO should be a top tech exposure due its high quality.
Morgans recently initiated coverage on the company with an add rating and $90.25 price target.
