Broker names 2 excellent ASX 200 blue chip shares to buy now

Bell Potter thinks investors should be snapping up these stocks before it is too late.

| More on:
A group of people in suits watch as a man puts his hand up to take the opportunity.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Do you have room in your portfolio for some ASX 200 blue chip shares?

If you do, then it could be worth listening to what analysts at Bell Potter are saying about the two named below.

Here's why its analysts think they would be great options for investors right now:

Premier Investments Limited (ASX: PMV)

Analysts at Bell Potter are feeling positive about this retail giant and see it as an ASX 200 blue chip share to buy.

The broker is particularly bullish on the Smiggle and Peter Alexander brands, that could soon be spun off into separate listings. It also sees a lot of positives from the proposed merger with Myer Holdings Ltd (ASX: MYR). It said:

In addition to PMV's market share of ~6% in the apparel vertical and ~15% in the stationary space in Australia, the Smiggle brand is also a large player in the UK market. As the Smiggle brand looks to grow its presence in Middle East & Indonesia via a low-risk wholesale model and Peter Alexander into the UK, we think the two brands have a long runway ahead. PMV is currently trading on ~15x FY26e P/E (BPe) which we think is conservative given the value that we see emerging from the potential demerger of PMV's two key brands, Smiggle and Peter Alexander which we believe are global roll-out worthy and highly profitable. We see further upside from the higher ownership PMV shareholders could receive in the Myer Group (MYR) given the potential to grow post MYR's turnaround phase and synergies from merging with PMV's apparel brands.

Its analysts currently have a buy rating and $35.00 price target on its shares.

TechnologyOne Ltd (ASX: TNE)

Bell Potter also thinks that TechnologyOne could be a great ASX 200 blue chip share to buy.

It believes its shares could re-rate to higher multiples due to its accelerating growth and predictable earnings. It explains:

The company designs, develops and installs ERP (enterprise resource planning) software for medium to large corporate and government customers. A key strength of the company is the software is now almost purely delivered on a SaaS basis (i.e. software-as-a-service) which is the same as companies like WiseTech (WTC) and Xero (XRO). The advantage of this delivery model is it generates recurring revenue for the company and makes the earnings very predictable. The shift to SaaS and the visibility of earnings has driven a re-rating in the PE ratio of the stock from c.30x a few years ago to c.40x now. We believe this re-rating will continue and think a PE of c.50x is ultimately achievable.

The broker currently has a buy rating and $20.25 price target on its shares.

Motley Fool contributor James Mickleboro has positions in Technology One and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Premier Investments and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Blue Chip Shares

A young man goes over his finances and investment portfolio at home.
Blue Chip Shares

Is this beaten down $8.5b blue chip ASX stock a bargain buy?

Goldman Sachs has given its verdict on this blue chip. Here's what the broker is saying.

Read more »

A group of people in suits watch as a man puts his hand up to take the opportunity.
Blue Chip Shares

2 high-quality ASX 200 blue chip shares to buy and hold in February

Analysts are expecting great returns from these buy-rated blue chips.

Read more »

Beautiful young couple enjoying in shopping, symbolising passive income.
Blue Chip Shares

2 ASX blue-chip shares that keep growing through every market

I’m impressed by the consistent growth of these two stocks.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Blue Chip Shares

2 of the best ASX 200 blue chip shares to buy with $2,000

One leading broker has very good things to say about these buy-rated shares.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Blue Chip Shares

Is it too late to buy this $33 billion ASX 200 stock?

Do analysts think this popular stock can deliver good returns for investors? Let's find out.

Read more »

Excited couple celebrating success while looking at smartphone.
Blue Chip Shares

2 high-quality ASX 200 blue chip shares to buy with $2,000 in February

These shares are highly rated by analysts at Bell Potter. But why?

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Blue Chip Shares

The one Australian stock to buy and hold forever in an ASX share portfolio

Buy and hold investing could be your ticket to wealth. Let's see why.

Read more »

Six smiling health workers pose for a selfie.
Blue Chip Shares

Should you buy CSL and ResMed shares in January?

Let's see what one leading broker is saying about these blue chips.

Read more »