Do you have room in your portfolio for a new addition? If you do and are interested in ASX 200 tech shares, then it could be worth considering Netwealth Group Ltd (ASX: NWL) shares.
That's the view of analysts at Bell Potter, which remains bullish on the investment platform provider following its quarterly update.
Image source: Getty Images
What is the broker saying?
Bell Potter highlights that Netwealth's fourth quarter update was slightly ahead of expectations thanks to positive market movements. It said:
Minor beat related to market movements and outlook parameters were reconfirmed. Gross flow momentum and managed account net flows held up despite elevated outflows. Investor caution was slight (middle east conflict and budget), and this was the key takeaway. Institutional accounts were weaker and the cause, while the superannuation segment delivered record net flows. Consensus net flows sit at the lower bound of the guidance range and offer further room for potential withdrawals.
Another positive is that its outlook commentary was unchanged, which it believes points to new run rate momentum.
Outlook comments are unchanged and indicate new run rate momentum: 1) elevated outflow impacts are expected to be temporary; 2) FY27 net flows of $18-20B, which would imply organic momentum and the partial benefit of new products; 3) EBITDA margins of 47%; and 4) investment in capitalised software of $17M. Net flow guidance wraps well around consensus expectations for $18.2B. Initiatives delivered in the period include an agentive AI agent for real-time support and improved execution.
Should you buy Netwealth shares?
According to the note, Bell Potter has retained its buy rating and $30.00 price target on Netwealth's shares.
Based on its current share price of $23.50, this implies potential upside of approximately 28% for investors over the next 12 months.
In addition, a dividend yield of 2.2% is expected in FY 2027. This stretches the total potential return over the period to approximately 30%.
If Bell Potter is on the money with its recommendation, this would turn a $10,000 investment into approximately $13,000.
Commenting on its buy recommendation, the broker said:
Our Buy rating and target price are unchanged. NWL remains on track to deliver free cash flow margins in-line with 5Y historical standards, balancing growth investments and profitability. Market share cadence and the current multiple make this attractive.
Overall, this could make the company worth considering if you are looking for exposure to this side of the market.
