A new month is here, so what better time to look at some new additions to your portfolio?
If you're on the lookout for some ASX 200 stocks to buy, then it could be worth listening to what Goldman Sachs is saying this week.
Buy this ASX 200 stock
Goldman Sachs believes that investors should be buying Lifestyle Communities Ltd (ASX: LIC) shares.
It is a developer, owner and manager of affordable independent living residential land lease communities. At the last count, the company had twenty-six residential land lease communities under contract, in planning, in development, or under management.
According to a note, Goldman has this ASX 200 share on its coveted conviction list and is tipping some very big returns over the next 12 months.
Its analysts currently have a buy rating and $27.95 price target on its shares. Based on the current Lifestyle Communities share price of $14.94, this implies potential upside of almost 90% over the next 12 months.
Why is Goldman bullish?
The team at Goldman Sachs believes that the ASX 200 stock is well-placed for long-term growth thanks to a number of factors. This includes Australia's ageing population, structural growth, and its positive development outlook. The broker explains:
Lifestyle Communities (LIC) is a developer and manager of residential land lease communities in Australia. The long-term outlook for LIC is very positive — we believe outperformance of the stock will be driven by: (1) a step up in the pace of land acquisitions, with industry build rates below demand from an ageing population; (2) structural growth in demand for land lease as the sector increases its penetration among retirees; (3) fundamental valuation support for cap rates. In our view, the next step for LIC is to expand its development pace to three communities p.a., which we believe will be a key catalyst for the stock, and we see LIC as well capitalised to fund a faster development pace through its capital recycling model. With LIC offering the highest 3-year AFFO CAGR relative to peers on at a slightly above median P/AFFO multiple, we remain Buy-rated (on CL).
