The head of research services at broker Bell Potter recently released 10 ASX 200 shares that analysts tip for a post-coronavirus recovery. All the stocks mentioned have a market capitalisation of more than $1 billion and boast strong balance sheets that could see them recover from the pandemic.
Aristocrat Leisure Limited (ASX: ALL)
Aristocrat is a gambling machine manufacturer that has a strong recurring revenue stream from leasing machines to its customers. The company also makes revenue through outright sales of gaming machines and monetisation of online casinos and gaming.
Analysts are optimistic on the medium-term growth of Aristocrat’s land-based operations, with the company having a strong presence in the US gaming industry. In addition, the company’s online operations are a growing market that provides Aristocrat with flexibility during the pandemic.
ANZ Banking Group (ASX: ANZ)
Analysts expect that economic growth post-pandemic should provide ANZ with a solid lift in profitability. The bank is currently providing financial assistance packages for its small business and retail customers.
BHP Group Ltd (ASX: BHP)
BHP boasts a strong balance sheet and low-cost operations with earnings coming from iron ore, copper and coal. Analysts are optimistic that BHP is well positioned during the pandemic, with improving commodity prices expected to benefit the company in the future.
Flight Centre Travel Group Ltd (ASX: FLT)
The pandemic has created an unprecedented challenge for travel and leisure companies like Flight Centre. The company has completed a $700 million equity raising and reduced its annualised operating expenses by $1.9 billion. As a result, analysts estimate that the company can survive for 15 months without revenue and post a recovery following the pandemic.
Macquarie Group Ltd (ASX: MQG)
Analysts are also optimistic on Macquarie Group to recover strongly post-pandemic. The investment bank has the ability to switch between market-facing and annuity-style operations, which makes it an attractive investment during and after the coronavirus pandemic.
Mirvac Group (ASX: MGR)
Mirvac owns and operates a commercial property portfolio that is exposed to office, retail and industrial properties, which account for 59% of group earnings. The coronavirus pandemic is expected to impact retail and other commercial rental incomes for the next 2 years. Despite this, analysts believe that Mirvac will recover post-pandemic with a secure income stream.
Origin Energy Limited (ASX: ORG)
Origin’s 2 main areas of operation are the energy markets and integrated gas, which contribute 44% and 56%, respectively, to group earnings. The energy market is expected to recover post-pandemic and analysts are optimistic that Origin energy will see a strong resurgence in energy and fuel demand.
Premier Investments Limited (ASX: PMV)
Premier Investments is the owner of prominent retail brands such as Smiggle, Peter Alexander and Just Jeans. Despite the pandemic causing havoc among retailers, Premier Investments is tipped to recover strongly. Analysts cited the company’s stance to pay adjusted rent and strong retail presence as factors that will help Premier Investments emerge stronger, post-pandemic.
Qantas Airways Limited (ASX: QAN)
With the pandemic bringing domestic and international travel to a grinding halt, airlines like Qantas have been some of the most adversely impacted companies. Despite the toll the pandemic has had on the company, analysts think that Qantas could see a protracted recovery. Analysts believe that Qantas can survive for up to 12 months with cost reductions and available liquidity of $4 billion.
Worley Ltd (ASX: WOR)
Worley is a global provider of engineering and project management services for the energy, chemicals and resource sectors. The pandemic has presented the company with a challenging operating environment, especially given the collapse in oil price. Analysts believe that the company will recover post-pandemic as activity levels improve.
In my opinion, Bell Potter provides high quality research and analysis, However, just because analysts think these shares could recover doesn’t mean that investors should jump the gun and start buying. As we have seen, the coronavirus pandemic is an evolving situation and nothing is certain.
I think a prudent strategy would be to compile your own watchlist of champion stocks and wait for positive price action before making an investment decision.
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Premier Investments Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
- Should you buy these 2 new ASX 200 index additions? – July 2, 2020 5:32pm
- Osteopore share price storms 270% higher on distribution deal – July 2, 2020 1:40pm
- Temple & Webster share price at an all-time high after capital raise – July 2, 2020 1:23pm