While some ASX 200 blue chip shares like Commonwealth Bank of Australia (ASX: CBA) and Wesfarmers Ltd (ASX: WES) are trading near record highs, not all are faring so well.
Two shares that are down in the dumps right now and could be dirt cheap according to analysts are listed below. Here's why they could be buys right now:
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James Hardie Industries plc (ASX: JHX)
Bell Potter thinks that this fibre cement manufacturer's shares have been oversold after dropping 34% from their 52-week high.
This has been driven partly by the announcement of a major acquisition, which the market has doubts on.
But with structural tailwinds in its sails, the broker thinks now is the time to invest. As a result, it has named James Hardie on its Australian equities panel, which is home to its top picks. It explains:
In our view, JHX is poised for continued earnings expansion, driven by the structural shift towards fibre cement in the US. Households in the US continue to shift to fibre cement cladding from vinyl/timber, providing a multi-year runway for JHX's revenue and profit growth.
Post JHX announcing its intent to purchase AZEK, the share price has fallen from ~25%. While debate still wages around the merits of the deal, we retain JHX in our focus list as we see upside from these levels.
Treasury Wine Estates Ltd (ASX: TWE)
This wine giant's shares have been hammered in recent months and are down 31% year to date.
A series of disappointing updates from the Penfolds owner has put significant pressure on its shares. This includes a guidance downgrade, distributor disruption, and the lowering of its earnings expectations for next year.
The team at Morgans remains positive on the ASX 200 blue chip share and thinks patient investors could be rewarded. It highlights that its shares are "in deep value territory but patience is required."
Commenting on the company's update this week, the broker said:
TWE has released its new divisional operating model (Penfolds, Treasury Americas and Treasury Collective) and a further update on its business performance. FY25 guidance was reiterated. In FY26, TWE is targeting further earnings growth, albeit more modest than its previous targets, particularly for Treasury Americas. An up to 5% share buyback was also announced.
We have revised our forecasts. While not without risk given industry and macro headwinds, TWE's trading multiples look far too cheap (FY25/26 PE of only 13.6/12.6x) and we maintain a BUY rating. However, we recognise the stock is lacking near-term catalysts and therefore patience is required given a material rerating may take time to eventuate.
Morgans has a buy rating and $10.25 price target on the blue chip.
