We’re coming into the final month of the Australian tax year. June 2022 could be a good month to invest in some of the S&P/ASX 200 Index (ASX: XJO) shares that experts have picked out as opportunities.
Different brokers have different opinions on various ASX 200 shares. However, when several brokers all think a business is a buy then it could be worth paying attention to that optimism. Or they could all simultaneously be wrong!
After all of the recent volatility of the ASX share market, the below two picks are highly recommended right now.
BlueScope Steel Limited (ASX: BSL)
BlueScope is a large steel business with operations in Australia and the US.
It’s currently rated as a buy by at least five brokers, including Citi. The broker has a price target of $22.50 on the business. That implies a possible rise of the BlueScope Steel share price of more than 20% over the next year. Other brokers have even more optimistic price targets.
Citi points to strong steel prices in the US which means things are looking good for potential profit generation by North Star and the North American coated business.
The Australian steel division is also benefiting from strong steel prices and better than expected contributions from the downstream businesses. However, it has seen softer than expected domestic despatch levels, due to a range of supply chain disruptions including the flooding on the east coast, rail outages, and COVID-19 impacts.
However, the ASX 200 share expects ongoing strength in raw material prices, combined with supply chain disruptions.
It now expects underlying earnings before interest and tax (EBIT) for the second half of FY22 to be in the range of $1.375 billion and $1.475 billion, which was an upgrade from the previous range of $1.2 billion to $1.35 billion.
In early trading on Tuesday, the BlueScope Steel share price is down 2% to $18.14.
CSL Limited (ASX: CSL)
CSL is one of the largest companies on the ASX. The healthcare giant provides various products including protein-based therapies and vaccines.
It’s currently rated as a buy by at least five brokers, including Citi. The broker has a price target on the business of $335, implying a potential upside of more than 20% on the current CSL share price of $274.05.
The broker points to positives that could boost the CSL share price including the acquisition of Vifor Pharma and strong demand for its products. Earlier in May, the company told investors that the regulatory approval process will take “a few more months”.
Management is still confident of completing the acquisition. It’s looking forward to expanding its presence in the rapidly growing nephrology market, as well as leveraging the companies’ combined expertise.
Based on the current earnings estimates for CSL, Citi thinks the CSL share price is valued at 39x FY22’s estimated earnings and 31x FY23’s estimated earnings.
This ASX 200 share is expecting to generate net profit after tax (NPAT) in FY22 of between US$2.15 billion and $2.25 billion in constant currency terms.