Goldman Sachs says these ASX 200 shares could rise over 40%

Here's why Goldman Sachs likes these ASX 200 shares…

| More on:
A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements

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

If you're looking for some new investments, it could be worth hearing what Goldman Sachs is saying about the ASX 200 shares listed below.

Its analysts rate these shares highly and see major upside potential for investors over the next 12 months. Here's what it is saying:

NextDC Ltd (ASX: NXT)

The first ASX 200 share that has been named as a buy is data centre operator NextDC.

NextDC continued its strong growth in FY 2022 thanks to the ever-increasing demand for space in its data centres thanks to the structural shift to the cloud.

The good news is that Goldman Sachs believes this strong demand is here to stay for some time to come. The broker has previously highlighted NextDC's "compelling" growth profile, its proven and profitable business model, and digital infrastructure characteristics.

Goldman currently has a buy rating and $14.30 price target on its shares. Based on the current NextDC share price of $9.06, this suggests potential upside of 49%.

Xero Limited (ASX: XRO)

Another ASX 200 share that could be a top option for investors according to Goldman Sachs is Xero.

It is a cloud accounting platform provider with ~3.3 million subscribers globally. From these subscribers, the company is currently generating annualised monthly recurring revenue (AMRR) of NZ$1.2 billion and EBITDA of NZ$212.7 million.

Pleasingly, although 3.3 million sounds like a lot of subscribers, it is barely scratching the surface of its addressable market, which management estimates to be 45 million subscribers globally. This gives the company a major runway for growth over the next decade.

Goldman also highlights that Xero is "well-placed to navigate this [economic] uncertainty given the stickiness & importance of its software."

The broker has a buy rating and $111.00 price target on Xero's shares. Based on the current Xero share price of $77.00, this suggests potential upside of 44% for investors.

Motley Fool contributor James Mickleboro has positions in NEXTDC Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Broker looking at the share price.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Broker Notes

Guess which ASX 200 share offers 12% upside and a 4% dividend yield

Bell Potter just slapped a buy rating on this stock.

Read more »

A man leaps from a stack of gold coins to the next, each one higher than the last.
Broker Notes

Qantas or Telstra share price: Which will climb higher in 2024?

Let's see what top broker Goldman Sachs has to say about these ASX blue-chip stocks.

Read more »

A woman smiles as she sits on the bus using her phone and listening to music through headphones.
Small Cap Shares

3 small-cap ASX shares with 'long runways for growth'

DNR's Sam Twidale reckons investors could do worse than buy these guys for the long run.

Read more »

Woman using laptop for job search
Investing Strategies

2 ASX 200 shares to buy for 'strong growth' at decent prices right now

Searching for a bargain? Here's a pair that Catapult's Dylan Evans has his eyes on at the moment.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

female in hard hat crosses fingers
Investing Strategies

The ASX 200 stock that could get second time lucky

These shares have failed to impress in 2024, but many experts believe it's a bargain buy.

Read more »