Using the TipRanks database, we have picked up two ASX stocks that have a Strong Buy rating from analysts. Biotechnology company CSL (AU:CSL) and services company Computershare (AU:CPU) have gained analyst confidence with their stable business performances.
Having a long-term vision as an investor is really important, and this is what makes all the difference. TipRanks provides many such tools, like Trending Shares and Top Smart Score Stocks, for investors to make the right choice. Trending Shares could be used to determine which stocks have received analyst ratings in the last few weeks.
In the Smart Score tool, a number is assigned to stocks to assess their capability to perform as compared to the overall market. On the Smart Score tool, both of these companies have a score of 10.
Let’s have a look at the details
Based in Australia, Computershare provides services such as governance and proxies, employee equity plans, issuer services, etc.
The company’s stock has been performing well and has gained almost 50% in the last three years. The stock is part of the ASX All Technology Index and has outperformed the index’s overall returns in 2022. However, in the last three months, the stock fell by almost 4%, making it a decent entry point for investors.
Analysts are mainly bullish on the stock due to the company’s strong business model, which makes it mandatory for it to hold huge cash balances. The company also earns interest on these balances, supporting its bottom line. In the fourth quarter of 2022, the company’s margin income increased by $26.3 million due to rising global interest rates. This also helped the revenues of $2.5 billion, which were 12.3% higher in 2022 as compared to the previous year.
With rising interest rates in the economy, the company is expecting huge growth in its interest income in 2023.
Computershare Stock Price Forecast
ABN Amro analyst Richard Coles recently reiterated his Buy rating on the stock, with a target price of AU$30.97, representing a 31.3% upside.
The average target price of Computershare stock is AU$29.98, which is 27% higher than the current trading price.
On TipRanks, the stock has a Strong Buy rating, based on seven Buy recommendations.
CSL is a biotechnology company, that focuses on the research and development of products and vaccines for rare diseases. It operates through four business segments, CSL Behring, CSL Plasma, CSL Seqirus, and CSL Vifor.
The analysts are most bullish on the company’s prospects in the plasma industry. CSL is a leading provider of plasma in the world, and it remains a strategic platform for the company. The two most important factors considered by analysts are the strong plasma demand, which gives a pricing advantage to the companies. Secondly, the margins are improving due to declining donor fees.
Moving forward, the company’s product pipeline remains strong. It includes the recent approval of HEMGENIX, a drug for hemophilia B. It is among the costliest drugs provided by the company, which could have a long-term impact on earnings.
Analysts expect growth of 20% and 23% in the company’s earnings per share in fiscal years 2023 and 2024, respectively.
CSL Ltd. Share Price Target
The stock price is quite shaky and has generated a return of just 3% in the last year.
The analyst sees a growth of almost 11% on the current trading price. The CSL average target price is AU$323.3.
Overall, CSL stock has a Strong Buy rating on TipRanks, based on seven Buy and two Hold recommendations.
The Strong Buy rating from analysts on these companies depicts strong earnings growth for the next couple of years.
Computershare is set to gain from the rising interest rate environment, while CSL is riding high on its prospects in the global plasma industry.