2 outstanding ASX 200 blue chip shares to buy

These blue chips could be buys…

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If you’re wanting to bolster your portfolio with some blue chip shares then you may want to consider the two listed below.

Both are high quality companies and have been rated as buys recently. Here’s what you need to know about them:

Goodman Group (ASX: GMG)

The first blue chip ASX 200 share to look at is Goodman Group. It is a leading integrated commercial and industrial property group. It has been growing at a solid rate over the last decade thanks to its successful strategy of focusing on investing in and developing high quality industrial properties in strategic locations. These are close to large urban populations and in and around major gateway cities globally.

Citi is a fan of Goodman. It currently has a buy rating and $27.50 price target on its shares. And while it acknowledges that its shares trade on high multiples, it notes that they are still lower than peers.

The broker explained: “We continue to see upside to FY22 guidance and now forecast FY22 EPS of 76.9c (+17% growth), 2% ahead of guidance. Importantly, our 3 year EPS CAGR lifts 200bps to ~16%, reflecting higher asset values, and development activity. We retain our Buy call with GMG now trading at ~30x FY22E PE, -3% to -25% below global peers, despite higher growth.”

REA Group Limited (ASX: REA)

Another blue chip ASX 200 share to consider buying is REA Group. It is the digital advertising company that operates Australia’s leading property website, realestate.com.au.

In addition, REA operates a range of complementary businesses in the Australian market and also internationally. All in all, together with new revenue streams, its good cost control, and a booming housing market, REA Group appears well-placed for growth.

Goldman Sachs is positive on the company’s outlook. It has a buy rating and $193.00 price target on its shares.

Following its first quarter update the broker commented: “Overall we revise higher our FY22 listing assumptions (+2% vs. -3% prior) but continue to expect declines in 2H22 (+7%/-3% in 1H/2H22 given the Fed election & tough comparable in 4Q21). Combined with higher yield growth & domestic opex assumptions, our FY22-24 core Australia EBITDA is +1% to +5%. When including the higher associate contributions our REA FY22-24 EPS +1% to +4% and our 12m SOTP-based TP increases +2% to A$193.”

This will ultimately mean EBITDA of $648 million in FY 2022, $730 million in FY 2023, and $815 million in FY 2024. Whereas for earnings per share, Goldman expects 294 cents, 337 cents, and then 387 cents.

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*Returns as of January 12th 2022

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 REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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