The ASX 50 index is home to many of the highest quality companies that the Australian share market has to offer.
And while not all shares in the index are necessarily in the buy zone right now, two that could be are listed below.
Here's why analysts at Morgans rate these ASX 50 shares highly:
Image source: Getty Images
QBE Insurance Group Ltd (ASX: QBE)
The first ASX 50 share that the broker has named as a buy is insurance giant QBE.
Morgans highlights that the company vastly outperformed expectations with its full-year results and is well-positioned for growth thanks to premium rate rises and higher investment income. It explained:
QBE's FY22 result NPAT (US$770m) was an 18% beat versus consensus, with the 2H22 dividend (A30cps) 11% above consensus. Overall, in our view, this was a very strong FY22 performance versus market expectations. Heading into FY23, the key tailwinds are premium rate increases and higher investment income which remain supportive of earnings growth, as highlighted by QBE expecting a mid-teens ROE versus 10.5% in FY22.
The broker has an add rating and $16.96 price target on its shares.
Telstra Corporation Ltd (ASX: TLS)
Another ASX 50 share that Morgans rates as a buy is telco leader Telstra.
The broker was pleased with the company's performance during the first half of FY 2023 and believes it is well-placed to build on this. This is thanks partly to favourable industry conditions. Morgans commented:
TLS delivered a 7.5% underlying ROIC in 1H23 (from 6.2% on 1H22) and is on-track for 8% in FY23. With a ROIC that now marginally exceeds WACC, TLS is back in the game of creating financial value. Mobile price rises across the sector should help competitors and continue pointing to industry rationality and sustainability. […] Telco has the strongest tailwinds in a decade with an increasingly rational market, price rises across the majors and the criticality of telco increasingly recognised.
The broker has an add rating and $4.70 price target on its shares.
