Having a few ASX 200 blue chip shares in a portfolio can be a good thing. This is because they tend to be lower-risk options and therefore can form a strong foundation to build your wealth from.
But which blue chips could be top options in October? Two that Goldman Sachs rates very highly are listed below. Here's why it is bullish on them:
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REA Group Limited (ASX: REA)
The first ASX 200 blue-chip share that has been named as a buy is REA. It is Australia's leading property listings company and the name behind the realestate.com.au website.
Goldman is very positive on the company and sees it as one of Australia's highest-quality businesses. It said:
We believe REA is among the highest-quality names in our coverage, given it has the highest ability to continue to drive pricing, with: (1) significant disparity between lead share and revenue share; (2) the lowest cost relative to overall transaction; (3) a profitable and still fragmented end market; and (4) the existence of Vendor Paid advertising, with strong valuation support with current trading multiples well below historical levels.
The broker currently has a buy rating and a $175 price target on its shares.
Woolworths Limited (ASX: WOW)
Another ASX 200 blue-chip share that Goldman Sachs rates very highly is Woolworths. It is of course Australia's largest supermarket operator. In addition, the company owns other brands such as Countdown and Big W.
Goldman believes Woolworths is well-placed to grow its market share thanks to its loyalty program and omnichannel advantage. It said:
We are Buy rated (on Conviction List) on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as pass through any cost inflation to protect its margins, beyond market expectations.
Goldman has a buy rating and a $42 price target on its shares.
