Goldman Sachs has been looking at a couple of popular ASX 200 stocks and has just given its verdict on them.
The good news is that the broker remains very positive on the two stocks and continues to forecast double-digit returns from their shares in 2024.
Here's what Goldman is saying about these ASX 200 stocks:
Treasury Wine Estates Ltd (ASX: TWE)
The broker highlights that wine demand in China is softening. It said:
The overall sentiment on the ground remains pessimistic and the current period for many industry participants is about 'survival'.
Nevertheless, the broker remains positive on Treasury Wine and has reiterated its buy rating and $12.40 price target on its shares. Particularly given the positive outlook for its recently acquired DAOU business in the United States. It said:
Whilst we factor in a softer China outlook, we reiterate Buy on TWE with TP of A$12.4/sh as we think it is already more than reflected in the latest valuation and US ex DAOU is showing stabilization trends with Matua and FFV continuing to grow. Our latest channel checks on DAOU suggest that it is of high quality especially around US$20-40/btl and that there is still ample headroom for distribution growth particularly in off-premise independent liquor retailers and on-premise channels.
Webjet Limited (ASX: WEB)
Another ASX 200 stock that has been given the seal of approval by Goldman Sachs is online travel agent Webjet.
Goldman has been speaking to one of Webjet's customers in China and was pleased with what it heard. It said:
Our China Travel & Leisure team hosted China's largest OTA & WEB customer in APAC Trip.com management for the GS China Consumer & Leisure Corporate Day last week. Despite softer travel data in recent weeks, TCOM said travel booking demand on its platforms remains resilient, giving them confidence to achieve their 4Q23 guidance.
And while recent industry commentary is a little softer than it was expecting, it believes that it will ultimately be in line with forecasts. As a result, it believes Webjet is positioned to hit the top end of its guidance in FY 2024. It adds:
Whilst the recent industry commentary of China outbound capacity recovering to 80%+ is slightly softer than initial expectation of 90%+, industry commentary is that CAAC is typically conservative and the actual run-rate through to December has continued to improve sequentially with the expectation of recovering to 70%+ through Chinese New Year (Feb 10, 2024). As a result, we continue to reiterate Buy for WEB on the back of still to recover APAC outbound capacity and notable operating leverage to meet the top-end of FY24 EBITDA guidance of A$180-190mn (GSe $190mn).
Goldman has a buy rating and $8.10 price target on Webjet's shares.
