Bell Potter names the best ASX retail shares to buy in 2022

Here are three retail shares to buy in 2022…

| More on:
ASX 200 retail shares a woman smiles over the top of multiple shopping bags she is holding in both hands up near her face.

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

Are you interested in investing in the retail sector? If you are, you may want to look at the ASX retail shares that Bell Potter has tipped as buys for 2022.

Here’s what the broker is saying about the sector and these shares:

Retail outlook

Bell Potter has concerns over the retail sector due to a number of factors. However, that doesn’t mean that some retail shares don’t have the potential to generate strong returns for investors.

Commenting on its concerns, the broker said: “We are cautious on the lookout for discretionary retailers based on several factors. These include: 1) emerging inflationary pressures and the prospects of rising interest rates; 2) the expected ramp-up of international travel in CY22, which will reduce share of wallet to retailers; and 3) ongoing risks surrounding the pandemic.”

Nevertheless, the ASX retail shares that Bell Potter believes are in the buy zone are as follows:

Accent Group Ltd (ASX: AX1)

Bell Potter is a fan of this leading footwear-focused retailer and has a buy rating and $3.05 price target on its shares. The broker believes Accent’s shares trade on undemanding multiples and offer a generous yield.

It commented: “The company’s recent AGM update indicated strong forward momentum, including a material upgrade in expected store openings in FY22, a turnaround in Glue Store, continued sales traction in Stylerunner which we believe offers material growth prospects, and the signing of a new exclusive distribution agreement for Reebok. AX1’s valuation is undemanding with FY23 PE of ~14x, and the dividend yield is an attractive ~5% (ff).”

City Chic Collective Ltd (ASX: CCX)

This plus-sized fashion retailer is another the broker likes. It currently has a buy rating and $7.40 price target on City Chic’s shares.

Bell Potter explained: “[City Chic] is a collective of customer-led brands including City Chic, Avenue, Evans, CCX, Hips & Curves and Fox & Royal. Following CCX’s recent acquisitions of Evans and Navabi, the company now has four high traffic online platforms across four key markets. These include City Chic in ANZ, Avenue in the USA, Evans in the UK and Navabi in Europe (primarily Germany, France and the UK). CCX also recently announced multiple new marketplace partnerships with major retailers across all key regions. With this foundation, plus >$60m in net cash available to acquire additional brands/ businesses, we believe CCX is well placed to grow market share globally.”

Propel Funeral Partners Ltd (ASX: PFP)

Finally, the broker is positive on this funerals company due to its defensive qualities and an expected volume recovery post-pandemic. Bell Potter has a buy rating and $5.00 price target on the company’s shares.

It commented: “Based on a proven growth strategy, the leadership of an experienced management team and with a strengthened balance sheet in place (post recent equity raise), we believe PFP is well positioned to drive further industry consolidation. PFP also stands to benefit from the attractive industry fundamentals, including the positive long term trend in case volumes underpinned by an ageing population, the industry’s highly defensive attributes and the relatively high barriers to entry.”

Motley Fool contributor James Mickleboro 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 has recommended Accent Group and Propel Funeral Partners Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

Two men in business attire play chess.
Resources Shares

OZ Minerals ‘completely in play’: Broker on BHP takeover bid

BHP's bid for OZ Minerals may not be over...

Read more »

a corporate-looking woman looks at her mobile phone as she pulls along her suitcase in another hand while walking through an airport terminal with high glass panelled walls.
Travel Shares

‘Downside is less severe’: Why some brokers are still bullish on the Qantas share price

This airline could see its shares fly higher.

Read more »

Two boys lie in the grass arm wrestling.
Investing Strategies

‘Cult following’: Expert names 2 ASX shares worth buying in August

There are plenty of catalysts to choose from during reporting season. Here's a pair of stocks that might move upward.

Read more »

A man reacts with surprise when her see a bargain price on his phone.
Cheap Shares

‘Capital light and scalable’: Expert picks 2 ASX shares to buy now while CHEAP

Who likes bargains? Pick up these beauties from the discount bin, says one financial advisor.

Read more »

ASX shares Business man marking buy on board and underlining it
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers rate these ASX shares as buys...

Read more »

Three people leaping in celebration against a blue sky.
Dividend Investing

Own Westpac shares? This broker expects the bank’s dividends to surge 10% by FY23  

Morgan Stanley sees blue skies ahead for the Westpac dividend.

Read more »

Two funeral workers with a laptop surrounded by cofins.
Consumer Staples & Discretionary Shares

Set to ‘quadruple footprint’: Expert names taboo ASX share to buy

This business is going gangbusters and is ready to provide nice returns from an industry always in demand.

Read more »

A man in his 30s holds his computer underneath and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Growth Shares

Brokers just rated these ASX 200 shares as buys in August

Pinnacle and Domain are two businesses worth investing in, according to experts.

Read more »