If you're looking to take advantage of recent weakness in the retail sector, then you might want to hear what Goldman Sachs is saying.
Its analysts have recently named two ASX 200 retail shares as buys. Here's why it remains positive on them:
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Breville Group Ltd (ASX: BRG)
Goldman remains positive on this appliance manufacturer and believes it is well-placed for growth despite the tough consumer environment. This is thanks to its exposure to the coffee market, which it expects to remain strong. The broker said:
We reiterate our Buy on structural growth of premium espresso coffee on still premature penetration and believe strong new product development pipeline will support above industry growth in a more modest growth environment. BRG is trading at 21.7x FY24 PE vs 9.0% EPS CAGR which is attractive relative to the rest of our discretionary coverage, the majority of which will be experiencing negative FY22-25 EPS growth.
Goldman has a buy rating and $22.50 price target on its shares. This compares to the current Breville share price of $19.61.
Super Retail Group Ltd (ASX: SUL)
Thanks to its extensive loyalty program, Goldman believes that Super Retail is an ASX 200 retail share to buy. It explains:
We view that SUL's strong loyalty ~70% of total sales (as of FY22) is coming from members across 4 core brands as well as increased investment in loyalty rewards and personalisation will drive annual spend. This will be the key driver of increased top line and margin resilience relative to other domestic discretionary retailers and remains our top-pick in this sub-sector.
Goldman currently has a buy rating and $13.60 price target on the company's shares. This compares favourably to the latest Super Retail share price of $11.18.
