When you're attempting to build a strong portfolio, having a few ASX 200 blue chip shares in there can be a good idea.
They can be used to create a firm foundation to build out from. But which blue chips could be good additions this month?
Let's take a look at two that brokers are tipping as top buys this week. They are as follows:
Flight Centre Travel Group Ltd (ASX: FLT)
The team at Morgans sees Flight Centre as an ASX 200 blue chip share to buy now.
It was pleased with the global travel agent's performance in FY 2024 and appears to believe that positive guidance will be provided to the market at its annual general meeting later this year. It said:
FLT's FY24 result was in line with its recent update. The highlights were the increase in its revenue margin to 11.4% vs 10.4% in FY23, the 2H24 NPBT margin of 1.7% and strong operating cashflow up 170% on the pcp. FLT said that its outlook is positive however in line with usual practice, FY25 guidance won't be provided until the AGM in November.
Morgans has put an add rating and $25.35 price target on the company's shares. This implies potential upside of 18% for investors from current levels.
REA Group Ltd (ASX: REA)
Bell Potter thinks that this real estate listings company could be an ASX 200 blue chip share to buy now.
Its analysts are expecting another strong year from the realestate.com.au operator. The broker said:
REA's market leadership position in its core Australian market is currently returning 30%+ on invested capital through a virtuous free cash flow/platform re-investment cycle. Guidance for a return to the top end of its 7-9% range of capex/revenue likely signals positive expectations for operating conditions during FY25 at this stage.
It also highlights that recent weakness means that value is emerging from its shares now. Bell Potter adds:
We prefer REA due to its large audience and network effect, generating pricing power and an economic moat that is difficult to duplicate. REA's continues to entrench its market leader position through a virtuous free cash flow/platform re-investment cycle which is returning 30%+ on invested capital. We see some relative value emerging end-FY25 with REA trading on fwd looking discounts to current TTM multiples.
Bell Potter has a buy rating and $226.00 price target on REA Group's shares. This suggests that upside of almost 17% is possible from current levels.
