Brokers think these 2 top ASX shares are buys in November 2021

Nextdc and Bapcor are two ASX shares that are buy-rated for November 2021.

| More on:
ASX shares Business man marking buy on board and underlining it

Image Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are some high-quality ASX shares that may be worth pursuing in November 2021 according to some brokers.

Those brokers are always on the lookout for potential investments that they believe are opportunities.

Share prices are constantly changing, so it can open up a potential investment quite quickly, if investors are able to jump on them.

With that in mind, the below two ASX shares are highly rated by brokers at the moment:

Nextdc Ltd (ASX: NXT)

Nextdc operates as a data centre-as-a-service provider. It says that it is building the infrastructure platform for the digital economy, delivering critical power, security and connectivity for global computing providers, enterprise and government.

It's currently rated as a buy by at least five brokers, including the analysts at Macquarie Group Ltd (ASX: MQG), which currently rates it as a buy with a price target of $16.10. That suggests the broker believes that Nextdc could rise by around 37% over the next 12 months, if the broker is right.

Macquarie thinks that Nextdc may be able increase its profit margins and it also thinks that the ASX share may be able to expand offshore.

In FY21, Nextdc's data centre services revenue grew by 23% to $246.1 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 29% to $134.5 million, beating the top end of management's guidance.

The operating cashflow surged 148% to $133.2 million, whilst capital expenditure was down 18% to $301 million with a "strong ongoing focus on capital management".

Contracted utilisation and the number of customers continues to increase as it makes progress developing its new data centres.

Nextdc is expecting more growth in FY22. Data centre services revenue is expected to grow to a range of between $285 million to $295 million. That means it's expecting growth of at least 15.8%.

Meanwhile, underlying EBITDA is expected to be in the range of between $160 million to $165 million. That suggests an increase of at least 19%.

Bapcor Ltd (ASX: BAP)

Bapcor is one of the largest auto parts businesses in the Asia Pacific region. It has numerous businesses including Burson, Autobarn, Midas and a number of specialist wholesale businesses like Truckline. The ASX share also has a growing presence in Asia with the purchase of a quarter of Tye Soon as well developing a (currently) small network of Bursons in Thailand.

It's currently rated as a buy by at least seven brokers. One of the brokers that likes Bapcor is Citi, which has a price target of $8.75 on the business. That suggests a potential rise of approximately 10% over the next 12 months.

Citi thinks the FY22 first quarter update showed how reliable Bapcor's demand is. The broker points to various growth plans that Bapcor has in place including growing in Asia and its plans to keep increasing its network of outlets.

In that quarterly update, Bapcor said that it has seen a "solid" start to FY22, with the overall group revenue flat in the first quarter of FY22 compared to the first quarter of FY21. Whilst stores are/were affected by the lockdowns in NSW, Victoria, the ACT and NZ, management think the result demonstrated the "resilience and non-discretionary nature of Bapcor's businesses".

Margins have been slightly hurt at the start of the financial year, but it's expecting margins to revert when lockdowns cease, which they predominately now have.

The ASX share itself said that it's working on three core areas. It's driving the expansion of its network footprint, both physical and online. Next, it is supplementing market-leading brands with Bapcor's own brand products. Finally, the auto parts business is looking to realise the benefits and efficiencies across the company.

Based on Citi's numbers, the Bapcor share price is valued at 20x FY22's estimated earnings.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Growth Shares

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Growth Shares

Big returns could be coming for high-flying Lovisa shares

Morgans doesn't believe it is too late to snap up this hot stock.

Read more »

Smiling young parents with their daughter dream of success.
Growth Shares

Why these ASX 200 growth shares could be top buys now

Analysts are feeling bullish about these growth stocks. Let’s see what they’re saying.

Read more »

Concept image of a man in a suit with his chest on fire.
Growth Shares

Ignore the noise and buy this hot ASX growth stock

A recent pullback may have created a buying opportunity according to Bell Potter.

Read more »

An ASX investor relaxes on her couch as the Harvey Norman share price drops due to the shares trading ex-dividend from today.
Growth Shares

Fund manager rates these 2 undervalued ASX All Ords shares as buys

A fundie has named two underrated stocks you need to know about.

Read more »

A young well-dressed couple at a luxury resort celebrate successful life choices.
Growth Shares

A once-in-a-decade chance to get rich buying ASX growth stocks?

Analysts think these shares are buys. Could they be the key to growing your wealth?

Read more »

Three exuberant runners dash towards the camera. One raises her arms in triumph; another jumps in the air with arms raised. The third runner gives a satisfied smile.
Growth Shares

3 hypergrowth ASX shares to buy in 2024 and beyond

If you're willing to accept some higher risk, these rapidly expanding companies could be worth a long-term chance.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
Growth Shares

These mid-cap ASX shares could rise 30% to 40%

Goldman Sachs thinks big returns could be on the cards for these mid caps.

Read more »

Woman in celebratory fist move looking at phone
Growth Shares

Broker says these ASX growth shares with very bright futures are top buys

The team at Morgans thinks these are the shares to buy now.

Read more »