Buy, hold, sell: Flight Centre, Suncorp, and Zip shares

Let's see if analysts are bullish or bearish (or something in between).

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Key points

  • Morgans sees Flight Centre's strategic acquisition of Iglu as a smart move, enhancing its Leisure business in the high-margin cruise sector, and maintains a buy rating with a price target of $18.38 due to the acquisition's immediate EPS accretiveness.
  • Ord Minnett remains cautious about Suncorp Group, citing challenges from premium rate softening and weather-related volatility, resulting in a hold rating and a reduced price target of $20.50 despite perceived value.
  • Macquarie is optimistic about Zip Co's potential, expecting rapid growth driven by product adoption and network expansion, thus retaining an outperform rating and setting a price target of $4.85, acknowledging potential earnings upside.

There are a lot of ASX 200 shares out there for investors to choose from.

Let's now take a look at three popular options and see if analysts rate them as buys, holds, and sells.

Here's what they are saying about them:

Flight Centre Travel Group Ltd (ASX: FLT)

Morgans was pleased with this travel agent's acquisition of UK based online cruise agency Iglu. This is due to Iglu operating in a high growth and high margin segment of the travel industry.

In response, the broker has retained its buy rating with an improved price target of $18.38. It said:

In our view, Iglu is a strategically sound acquisition for FLT's Leisure business unit, given the cruise sector is a high growth and high margin segment within the travel industry. The acquisition multiple was reasonable for an online business and, importantly, is immediately EPS accretive. FLT's strong balance sheet can comfortably fund this acquisition and its capital management strategy. We have upgraded our forecasts to reflect the acquisition of Iglu. Despite recent share price appreciation, FLT's fundamentals remain attractive and we retain a Buy recommendation with a new A$18.38 price target.

Suncorp Group Ltd (ASX: SUN)

Over at Ord Minnett, its analysts aren't feeling overly positive on insurance giant Suncorp due to its softening premium rate growth.

Although the broker sees value in its shares, it isn't enough to give it a buy rating. Instead, the broker has put a hold rating and $20.50 price target on Suncorp. It said:

Between weather-related volatility and an industry-wide slowdown in premium rate growth, the outlook for Suncorp (and its peers) remains challenging. This leads Ord Minnett to cut its target price on Suncorp to $20.50 from $22.50, and maintain its Hold recommendation despite the apparent value on offer.

Zip Co Ltd (ASX: ZIP)

Finally, Macquarie remains very bullish on this buy now pay later provider. Although it acknowledges that its rapid total transaction value (TTV) growth is leading to higher loss rates, it believes Zip will still achieve its net transaction margin (NTM) guidance.

As a result of this and its rapid growth, the broker has put an outperform (buy) rating and $4.85 price target on its shares. It commented:

Outperform. We forecast Zip to continue to deliver rapid growth supported by increased product adoption, expansion of merchant network, increased customer engagement and digital product innovation. […] We expect ZIP to deliver attractive TTV growth and NTM in the guidance range, with potential upside risk to earnings.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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