Not all S&P/ASX 200 Index (ASX: XJO) shares are created equal.
That may seem an obvious statement.
But with 2022 having seen inflation rocketing to 30-year highs with the prospect of a recession ahead, the ASX 200 shares that outperformed during the COVID recovery years may not deliver that same strong performance in the year ahead.
So which blue-chip companies look best set to weather the inflation storm?
For some expert insight into that, we defer to the analysts over at Perpetual Asset Management Australia.
Three ASX 200 shares to weather the inflation storm
When looking for ASX 200 shares likely to outperform in a time of high inflation and rising interest rates, the analysts focused on companies with pricing powers that are able to better control their own destinies than their competitors.
The first ASX 200 share to make their list is automotive spare parts and accessories giant Bapcor Ltd (ASX: BAP).
"Australia's new and used car market has experienced unprecedented demand over 2022, and we expect this growth to continue in the medium term," Perpetual said. "The attraction of the business centres on the strength of their competitive position within the automotive aftermarket industry, the nature of that industry, as well as Bapcor's proven strategy."
Perpetual notes that the number of cars in Australia continues to grow consistently even as they get more technologically complex, requiring higher-end repair and maintenance parts.
According to Perpetual:
Their customers are essentially the mechanics, and the mechanics are much more focused on getting the right part quickly, than on price. Ultimately, that means Bapcor has a high degree of pricing power, an attribute that is increasingly important in the current inflationary environment.
Which brings us to the second inflationary resilient ASX 200 share.
The world's largest pallet pooling operator
Brambles Ltd (ASX: BXB) has operations in 60 nations. Its pallets and containers are used to transport goods across the world.
Explaining why Perpetual likes this ASX 200 share in today's inflationary environment, the analysts note: "The transport and logistics company has been able to use its considerable pricing power and clout in the market as insulation from inflationary costs, while also being disciplined in recovering costs."
According to Perpetual:
Brambles has kept revenues strong over 2022 through its ability to pass on in full the rising costs of timber, fuel, labour and transport to customers using its pool of 360 million pallets, crates and containers…
We expect Brambles to win new customers in the US, management to extract better operating performance from the existing network and to continue to push prices to reflect the higher inflation in the business.
They noted this ASX 200 share achieved a 14% year-on-year profit growth in 2021-22 "despite having to absorb US$470 million in timber price inflation".
The third inflation-resistant ASX 200 share
Rounding off the list of ASX 200 shares likely to outperform in a time of rising interest rates and high inflation is telecommunications and information service provider Telstra Group Ltd (ASX: TLS).
Perpetual said it's bullish on Telstra, with its analysts "attracted to Telstra's market-leading mobile position".
On the inflation front, Perpetual notes that Telstra "offers an infrastructure-like exposure through the Infraco assets, in particular inflation-linked receipts from the National Broadband Network for use of Telstra's network assets".
The analysts said there is some risk that rising interest rates could see some valuation pressure on this ASX 200 share. However, they added that "the quality, scale and defensive revenue attributes of Telstra's network assets make them an appealing proposition".
