There are a large number of quality shares on the ASX that could deliver strong returns over the next 12 months and beyond.
Ten that are highly rated are listed below. Here's why investors might want to consider them this month:
Adore Beauty Group Limited (ASX: ABY)
Adore Beauty is Australia's leading online beauty retailer. Like many ecommerce businesses, it has been growing very strongly during the pandemic. For example, the company recently reported half year revenue of $96.2 million and EBITDA of $5.2 million. This was up 85% and 188%, respectively, over the prior corresponding period. This result went down well with analysts at UBS. In response to its release, the broker put a buy rating and $6.20 price target on its shares. It appears confident its strong market position and growing active customer numbers will support more strong growth over the 2020s.
Altium Limited (ASX: ALU)
Altium is an electronic design software provider. It is best-known for its Altium Designer and Altium 365 platforms. These platforms are regarded as the best in the industry and are used by many of the world's largest companies such as BAE Systems, Microsoft, and Tesla. Altium looks well-placed for growth over the next decade thanks to the internet of things and artificial intelligence booms. These are driving strong demand for electronic design software. One broker that likes what it sees here is UBS. Last month it upgraded Altium's shares to a buy rating with a $34.00 price target.
Appen Ltd (ASX: APX)
Appen is a leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Through its team of one million+ contractors, Appen prepares or creates the data for the machine learning models of some of the largest tech companies. These includes Amazon, Facebook, and Microsoft. Late last month Ord Minnett upgraded its shares to a buy rating with a $24.75 price target.
CSL Limited (ASX: CSL)
CSL is one of the world's leading biotechnology companies, comprising the CSL Behring and Seqirus businesses. Both are leaders in their respective fields – plasma therapies and vaccines. While plasma collection headwinds have been weighing on collections and investor sentiment this year, CSL appears well-placed for growth once conditions ease. Particularly given its lucrative R&D pipeline. Last week Citi upgraded its shares to a buy rating with a $310 price target.
Kogan.com Ltd (ASX: KGN)
Kogan is one of Australia's leading ecommerce companies. Like Adore Beauty, it has been growing very strongly thanks to the accelerating shift to online shopping caused by the pandemic. For example, during the first half of FY 2021, Kogan reported a 97.4% increase in gross sales to $638.2 million and a 250.2% lift in adjusted net profit after tax to $36.5 million. Analysts at Credit Suisse were impressed. The broker has put an outperform rating and $20.85 price target on its shares.
NEXTDC Ltd (ASX: NXT)
NEXTDC is Australia's leading data centre operator with a total of nine centres located across Australia. It has been experiencing very strong demand for capacity in its data centres thanks to the shift to the cloud. This led to NEXTDC reporting a 29% increase in EBITDA to $65.7 million for the first half of FY 2021. Pleasingly, more of the same is expected in the second half. In addition to this, the company is looking into expanding into Asia. This could provide it with a very long runway for growth. UBS is positive on the company. It has a buy rating and $15.40 price target on its shares.
Pushpay Holdings Group Ltd (ASX: PPH)
Pushpay is leading donor management and community engagement platform provider for the faith sector. It has also been a strong performer during the pandemic. This has been driven partly by the accelerating digitisation of the church. In fact, demand has been so strong, Pushpay is expecting to achieve full year operating earnings of US$56 million and US$60 million. This will be up 123% to 139% year on year. Goldman Sachs is a fan of the company. It has a conviction buy rating and $2.59 price target on its shares.
REA Group Limited (ASX: REA)
REA Group is the dominant player in real estate listings in the Australian market. It looks well-placed for growth in the coming years thanks to the improving housing market, new revenue streams, cost cutting, price increases, and its international operations. Morgan Stanley is very positive on the company's prospects. As a result, it has an overweight rating and lofty $175.00 price target on its shares.
ResMed Inc. (ASX: RMD)
ResMed is a sleep treatment-focused medical device company. Thanks to its industry-leading products, growing software business, and the increasing awareness of sleep disorders, it has been growing at a strong rate for a good number of years. Pleasingly, it still has a significant market opportunity to grow into. Management estimates that there are ~1 billion people suffering from sleep apnoea worldwide, with only ~20% of these sufferers currently diagnosed. It also looks well-placed to benefit from the shift to home healthcare. Morgans is a fan of ResMed. It recently retained its add rating and put a price target of $30.09 on its shares.
Xero Limited (ASX: XRO)
Xero is a provider of a cloud-based business and accounting solution to small and medium sized businesses. It has been growing strongly over the last few years and looks well-positioned to continue the trend in the years to come. This is thanks to its international expansion, acquisitions, the transition to the cloud, and its burgeoning app ecosystem. Goldman Sachs is very positive on the company. It has a buy rating and $157.00 price target on its shares. The broker believes Xero is capable of delivering strong revenue growth over multiple decades.
