If you would like to strengthen your portfolio, then you might want to consider buying the quality ASX 200 shares listed below that Goldman Sachs rates as buys.
Here's why its analysts are bullish on them:
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Cochlear Limited (ASX: COH)
The first ASX 200 share that Goldman has named as a buy is Cochlear. It is a global leader in the development, manufacture, and distribution of cochlear implantable devices for the hearing impaired.
The company has been growing at a solid rate for over a decade thanks to its expanding global distribution network, its investment in research and development, and growing demand.
The good news is that Goldman believes this positive trend can continue. It said:
Looking forward, we continue to express a general preference for the device/drug names over the service providers in the current environment, on the basis of: i) stronger pricing power; ii) more assured volume profiles; iii) more resilient/expanding market shares; and iv) stronger balance sheets. […] We believe Cochlear screens well on these fundamental factors, and largely avoids the margin uncertainties prevalent across other verticals. […] We forecast above guidance in FY23E (GSe: $306m vs. $290-305m) and believe shares will now be further supported by a newly announced multi-year buyback program.
Goldman Sachs has a buy rating and a $265 price target on Cochlear's shares.
Qantas Airways Limited (ASX: QAN)
Another ASX 200 share that Goldman Sachs has named as a buy is Qantas.
As well as being the flag carrier airline of Australia and the operator of the Qantas and Jetstar brands, the company also has a very lucrative loyalty business and a highly profitable freight business.
Goldman Sachs has been impressed with the company's post-pandemic transformation and feels the market is undervaluing its shares at present. It commented:
Notwithstanding a decline in unit revenues (and group capacity still at 96% of pre-COVID), our estimated FY24e EPS sits 65% above pre-COVID levels. Despite this, QAN's market capitalisation is 1% below pre-COVID levels (EV 14% lower). We acknowledge broader macro uncertainty at this point in the cycle, but we believe the current share price does not reflect the group's improved earnings capacity.
Goldman has a conviction buy rating and a $8.50 price target on its shares.
