Two ASX 200 stocks with buy recommendations from Ord Minnett

Wealth and investment services firm Ord Minnett has provided fresh guidance on two ASX 200 stocks. 

The broker has reinforced its buy ratings on both, while slightly adjusting its price targets. 

Here's what's behind the ratings. 

Metcash Ltd (ASX: MTS)

This ASX 200 stock operates in the consumer staples sector.

It is a wholesale distribution and marketing company specialising in food, liquor, and hardware. The company supplies and supports independent retailers in Australia.

According to Ord Minnett, Metcash posted first-half FY26 earnings short of market expectations, driven partly by the earlier recognition of restructuring costs than consensus had forecast. 

The key food business met forecasts, but the hardware and liquor divisions fell short of expectations.

It also noted that as with Endeavour Group Ltd (ASX: EDV) and Coles Group Ltd (ASX: COL), the liquor market continues to struggle, as the industry faces headwinds from changing consumer attitudes to health and cost of living pressures. 

Liquor EBIT fell 8.4% excluding reconstruction costs, and we highlight the risk of greater promotional intensity from rivals as suppliers battle for market share.

Post the result, Ord Minnett cut EPS estimates by 8.0%, 9.2% and 8.3% for FY26, FY27 and FY28, respectively, primarily due to the challenges facing the liquor and hardware operations. 

This leads us to cut our target price on Metcash to $4.00 from $4.60, but we maintain our Buy recommendation on valuation grounds.

Based on the updated price target of $4.00, this indicates an upside of 23.46% for this ASX 200 stock from its current price. 

BlueScope Steel Ltd (ASX: BSL)

The ASX 200 company is an Australian-based steel manufacturer supplying global markets. 

Spun out of BHP Billiton in 2002, BlueScope produces a range of steel products, systems, and technologies and is one of the world's leading producers of painted and coated steel products.

Ord Minnett said the company recently hosted an investor day, where the company showcased its new electric arc furnace (EAF). 

It seems Ord Minnett has a positive view on this development. 

Ord Minnett views the EAF project as positive, with a boost at the earnings before interest and tax (EBIT) line of $80 million annually targeted for the New Zealand division. Against the $160 million investment from BlueScope, this looks to be an optimal use of funds if the targets can be achieved.

Post the investor day, it left FY26 EPS forecast unchanged. 

However, Ord Minnett raised FY27 and FY28 estimates by 2.4% to incorporate increased earnings from the New Zealand assets.

Our target price on BlueScope increases to $27.50 from $27.00, and we maintain Buy recommendation.

The updated price target of $27.50 indicates an upside of 13.36% from yesterday's closing price. 

The post Two ASX 200 stocks with buy recommendations from Ord Minnett appeared first on The Motley Fool Australia.

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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