If you are looking to strengthen your portfolio with some blue chip ASX 200 shares, you may want to look at the two listed below that have been named as buys by Goldman Sachs.
Here's why these blue chip shares are highly rated by its analysts right now:
REA Group Limited (ASX: REA)
The first ASX 200 blue chip share to buy according to Goldman Sachs is REA Group. It is the digital advertising company that operates Australia's leading property website, realestate.com.au. In addition, REA operates a number of complementary businesses in the Australian market and internationally.
While the housing market downturn is expected to weigh on listing volumes in the near term, Goldman Sachs remains positive on its outlook. It said:
Listings remain a headwind for REA through FY23 with 2Q weekly listings remaining soft – although 2H23 remains uncertain, we now forecast -8% total listings declines in FY23E, driving small downward revisions to REA/DHG (-2% EBITDA in FY23E), but we expect [this] will ultimately be recovered, with +13% upside to our estimated mid-cycle listings volumes.
The broker has a buy rating and $159.00 price target on its shares.
Woolworths Limited (ASX: WOW)
Another blue chip ASX 200 share that Goldman Sachs rates highly is Woolworths. It is the retail conglomerate behind businesses including Woolworths, Countdown, Everyday Rewards, and Big W.
The broker believes its shares are trading at an attractive level after recent weakness. Particularly given its positive outlook through to FY 2025.
It recently commented:
Despite a noisy and softer 1Q23, we remain confident that WOW is the superior operator within AU supermarkets with a clear growth pathway to deliver ~3% sales and ~9% NPAT FY22-25e CAGR. WOW is trading at 22.1x FY24E P/E vs our TP implied 27.8x and historical average of 23.2x, providing a value entry point to a quality player in our view. Reiterate Buy (on CL).
Goldman Sachs has a conviction buy rating and $41.70 price target on the company's shares.
