Goldman Sachs has just introduced a new investment list that highlights a selection of fundamental buy-rated Asia-Pacific (APAC) stocks across its Global Investment Research department.
This new list, which is named the APAC Conviction List – Directors' Cut, is designed to provide investors with a curated and active list of 20-30 stocks that the broker believes to be differentiated fundamental buy ideas across its Asia-Pacific coverage.
Among the list this month are three ASX 200 shares. Here's why Goldman rates them among the best of the best in the region right now:
CSL Limited (ASX: CSL)
Goldman believes that the biotherapeutics giant is a buy. Particularly given that it is entering a capital-efficient growth period. It explains:
Chris Cooper upgraded to Buy on November 14 and believes CSL is now entering a period of more capital-efficient growth, driving a sharp improvement in ROIC (+460bps by FY27E). This positive inflection also coincides with a period of historically-high earnings growth (+14% CAGR FY23-27E vs. +9% pre-Covid i.e. FY15-19) driven by core plasma franchise (Behring) margin recovery.
The broker has a conviction buy rating and a $309 price target on the ASX 200 share.
Lynas Rare Earths Ltd (ASX: LYC)
Another ASX 200 share that Goldman is very bullish on its rare earths producer Lynas. The broker believes investors should focus less on the short term and more on its bright long-term outlook. It said:
With the global neodymium (Nd) & praseodymium (Pr) market dominated by China (~70-80% of production), Lynas is an important ex-China source of NdPr. With the commissioning of LYC's Kalgoorlie facility underway and the recent 3-year extension to LYC's operating licence in Malaysia, Paul Young believes investors should look through FY24 considering it is a transitional year.
Goldman has a conviction buy rating and a $7.50 price target on its shares.
Woolworths Group Ltd (ASX: WOW)
Finally, Goldman sees this retail giant as an ASX 200 share to buy now due to its potential to win further market share. It explains:
Lisa Deng forecasts Woolworths will deliver FY23-26E 3-yr group NPAT CAGR of 8.2%, on the back of 1) robust supermarkets growth of ~4% in FY23-26E, 2) further market share gain due to early mover advantage in digitalization and omni-channel execution, and 3) loyalty/retail media further margin opportunities.
The broker has a conviction buy rating and a $42.40 price target on Woolworths' shares.
