There are a good number of blue chip ASX 200 shares to choose from on the Australian share market.
But two of the best, according to the team at Morgans, are listed below.
Here's why the broker rates these blue chips highly:
Wesfarmers Ltd (ASX: WES)
This conglomerate could be an ASX 200 blue chip share to buy according to Morgans.
The broker rates its management team highly and believes its retail portfolio is well-placed in the current environment due to its value offering. In addition, it highlights the strength of its balance sheet, which opens up the potential for earnings accretive acquisitions. The broker explains:
WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Wesfarmers Consumer Staples Kmart and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. We believe WES's businesses, which have a strong focus on value, remain well-placed for growth despite softening macro-economic conditions.
Morgans has an add rating and $55.50 price target on Wesfarmers shares.
Westpac Banking Corp (ASX: WBC)
Morgans believes that Australia's oldest bank could be a top ASX 200 blue chip share to buy
The broker is bullish on Westpac due to its belief that it has the best return on equity improvement potential among the big four banks. It commented:
We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.
Morgans has an add rating and $25.98 price target on Westpac's shares.
