If you are on the hunt for some new ASX 200 stocks to buy, then it could be worth listening to what Goldman Sachs is saying about the two listed below.
They have both been named on its highly coveted Asia-Pacific conviction list in May, which is home to the crème de la crème of stocks.
Let's see why the broker rates them as strong buys:
Image source: Getty Images
NextDC Ltd (ASX: NXT)
This data centre operator is a new addition to the broker's conviction list. It is feeling particularly bullish about this ASX 200 stock due to its exposure to the rapid growth in cloud adoption.
Goldman also highlights that its shares are trading at a sharp discount to peers when adjusted for growth. In light of this, it thinks now is a great time to pick up shares. The broker explains:
NextDC is an Australian based Data Centre operator. We are particularly positive on NXT and are Buy rated given the rapid growth in cloud adoption, which has been supported by the continued evolution of the enterprise telecommunications market, and the significant demand by both public and private investors for digital infrastructure assets. We believe the company has a compelling growth profile and a proven and profitable business model, noting it trades on a growth-adjusted discount vs. peers, which we view as unjustified.
Goldman has a buy rating and $16.50 price target on its shares. This implies potential upside of 20% for investors over the next 12 months.
ResMed Inc. (ASX: RMD)
Another ASX 200 stock that features on the broker's conviction list this month is sleep disorder treatment company ResMed.
Much like NextDC, the broker believes that the market is undervaluing its shares based on its very positive growth outlook. It explains:
RMD is the world's leading CPAP manufacturer of devices and masks in the treatment of OSA. The company has expanded to providing software services to out of hospital healthcare providers including Durable Equipment Manufacturers (DMEs), nursing homes and home health and hospice agencies. Our Buy recommendation on RMD is premised on (1) Ongoing robust new patient growth for CPAP therapy despite the market entry of GLP-1 drugs to treat OSA, (2) Further RMD market share gains, building on its #1 global market position, (3) Expansion of the OSA market in regions outside of the US. We believe the stock's current trading multiple is unjustified based on its growth outlook.
Goldman has a buy rating and $49.30 price target on ResMed's shares. This suggests that upside of 32% is possible between now and this time next year.
