The Australian share market is home to a number of quality companies with solid growth prospects.
Two that have been tipped to grow strongly over the long term are listed below. Here’s why analysts think investors should be buying their shares:
PointsBet Holdings Ltd (ASX: PBH)
PointsBet is a leading sports betting company with operations in the ANZ and US markets.
It has been a very impressive performer in FY 2021, delivering explosive growth in both markets. For example, during the third quarter, PointsBet reported a 236% increase in turnover to $905.2 million. This was driven by a 137% lift in Australian turnover to $423.2 million and a 431% jump in US turnover to $482 million.
The good news is that the latter is still only a fraction of its market opportunity in the enormous US market. Goldman Sachs notes that the US sports betting market is forecast to grow at a compound annual growth rate of 40% out to 2033. It estimates that it will be worth US$39 billion a year at that point.
In light of this and its belief that PointsBet is well-placed in this market, Goldman Sachs currently has a buy rating and $17.20 price target on its shares.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is Australia’s leading online furniture and homewares retailer. It has been growing at a strong rate over the last few years and particularly during the pandemic. This has been driven by the accelerating shift to online shopping.
And while Temple & Webster’s growth may moderate now that COVID tailwinds are easing, management remains very confident in its growth prospects. This is largely due to its strong position in a market which is still only really beginning to see sales shift online.
In order to take advantage of the shift and cement its position as the market leader, management is now investing heavily in its sales growth. And although this will come at the expense of margins, it believes the long term gains make it more than worthwhile.
One leading broker that agrees is Morgan Stanley. It is confident in this strategy and has recently put an overweight rating and $15.00 price target on its shares.