There’s an unmistakable air of optimism around this reporting season. If this is putting you in a buying sort of mood, there are the latest ASX stock “buy” ideas from leading brokers.
It’s also safer to buy stocks when the tide is rising, and this certainly was the case today with the S&P/ASX 200 Index (Index:^AXJO) gaining 0.5%.
Investors seem to have forgotten their COVID-19 fears as the early profit result releases are better than what many have feared. Let’s hope this continues.
While this isn’t typically the ideal time to be buying stocks (not so early into the reporting season), brokers think now is the right time to be buying these ASX stocks.
The GPT Group (ASX: GPT) share price may appeal to value buyers with a stomach for volatility. JPMorgan reiterated its “overweight” recommendation on the retail and office property group even after its interim results missed its mark.
But the broker isn’t concerned even though it warned that GPT’s properties is likely to suffer more write downs due to the COVID-19 fallout.
The group reported a net tangible asset (NTA) of $5.52 a share, which is 5% lower than in December. This is likely to fall again with JPMorgan forecasting a 30% drop in the value of GPT’s retail properties and a 20% decline in its office portfolio.
Even then, GPT’s NTA should come in at around $4.50 a share, which is well ahead of GPT’s last closing price of $4.03.
JPMorgan’s price target on the group is $4.70 a share.
On the right track
Meanwhile Morgans is sticking to its “add” recommendation on the Aurizon Holdings Ltd (ASX: AZJ) share price.
The rail operator’s full year results came in ahead of expectations, although its FY21 outlook was softer than what the broker would have liked.
But Aurizon’s defensively positioned business is ideal in this volatile environment. What’s more, Morgans believes it can lift its dividend from 27 cents a share to 31 cents in FY22.
Even on the current dividend, the stock’s yielding close to 6% before its 70% franking credit.
Aurizon’s strong balance sheet is another thing to like about the stock with management using its excess firepower to fund a $300 million on-market share buyback.
Morgan’s price target on the stock is $15.14 a share.
New highs likely
Finally, don’t let the rocketing James Hardie Industries plc (ASX: JHX) share price put you off even as it hits a new record high of $32.22 on Tuesday.
Goldman Sachs believes there’s more upside following the building materials group’s latest quarterly earnings update.
The broker was particularly taken by James Hardie’s outlook for its North American business, which appears to be taking market share.
The outperformance of this division is behind management’s upbeat FY21 net profit guidance of US$330 million to US$390 million. This compares with consensus estimates at US$344 million.
The broker’s 12-month price target on the stock is $34.38 a share.
These 3 stocks could be the next big movers in 2020
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
Motley Fool contributor Brendon Lau owns shares of James Hardie Industries plc. The Motley Fool Australia has recommended Aurizon Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
- Meet the latest ASX stock to come under the takeover spotlight – November 30, 2020 5:24pm
- What Australia’s recovery from the COVID recession means for the Santa Rally – November 30, 2020 12:36pm
- Is it too late to buy the surging Bega (ASX:BGA) share price? – November 27, 2020 3:57pm