Brokers name 2 strong ASX 200 shares to buy now

MotleyFool
2024-11-05

There are a total of 200 ASX shares to choose from on the benchmark S&P/ASX 200 Index (ASX: XJO).

But not all of them are necessarily good investments. So, which ones are?

Luckily, brokers have done the hard work for you and picked out two they rate highly. They are as follows:

ALS Ltd (ASX: ALQ)

The team at Morgans thinks that this testing services company could be an ASX 200 share to buy.

The broker likes ALS due to the positive outlook for its Life Sciences business and exposure to the commodities cycle. It believes a positive part of the latter may not be too far away.

ALQ looks poised to benefit from margin recovery in Life Sciences as well as a cyclical volume recovery in Commodities. Timing around the latter is less certain though our analysis indicates we may not be too far away (3- 12 months).

In addition, commodity prices are supportive with both gold & copper around all-time highs at US$2650/oz & US$4.50/lb respectively. Investment view: ALQ is the dominant global leader in geochemistry testing (~50% market share), which is highly cash generative and is little chance of being competed away for a variety of reasons. The excess capital from Commodities is used to fund capital driven earnings growth in Life Sciences.

Morgans has put an add rating and $15.50 price target on its shares.

CSL Ltd (ASX: CSL)

Another ASX 200 share that brokers are bullish on is biotechnology giant CSL.

Bell Potter is bullish on the company's outlook, believing that it can deliver double digit earnings growth over the medium term even if not all of its businesses are firing on all cylinders.

This is thanks largely to the key CSL Behring business, which is expected to do the heavy lifting in the near term. It explains:

CSL is a global biotechnology company holding the #1 or #2 position in its three key markets: (1) plasma-derived therapies (Behring), (2) flu vaccines (Seqirus) and (3) iron products (Vifor). Behring is CSL's largest division (72% of revenue) and we expect it will continue to do the heavy lifting in the near-term, both in topline growth and margin expansion.

CSL's FY25 revenue guidance of 5%-7% (BPe 6.5%) is comprised of "high single digit" growth for Behring and "flattish" growth for Seqirus and Vifor. Behring's more favourable outlook, coupled with its gross margin recovery to pre-pandemic levels (which we expect in FY28), results in confidence that CSL will be able to achieve its guidance of "annual double-digit earnings growth" over the mid-term, despite more challenging near-term prospects for Seqirus and Vifor.

Bell Potter currently has a buy rating and $345.00 price target on the ASX 200 share.

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