ASX shares are building on yesterday's strong gains and eyeing new highs, but this doesn't mean there aren't value buys still to be had.
The S&P/ASX 200 Index (Index:^AXJO) added 0.5% in late morning trade after jumping nearly 2% on Monday.
It's not eyeing the record high it hit in February last year just before the COVID-19 meltdown.
The ASX share that's upgraded to buy ahead of take-off
But it isn't too late to join the party! The analysts at Macquarie Group Ltd (ASX: MQG) just upgraded the Flight Centre Travel Group Ltd (ASX: FLT) share price to "outperform" from "neutral" after conducting a post-results review of the retail sector.
"Retail was a bright spot with EPS estimates upgrades by +11.6% in the month of February," said the broker.
"This was the first sector upgrade since Aug-17 (as a reminder, the Retail universe was downgraded by an average of -6% in each month of 2020)."
Retail reflation leverage boosts Flight Centre share price
Among retail stocks, few would have as significant leverage to the so-called "reflation trade". COVID losers stand to recover the most as mass vaccinations are rolled out around the world.
Flight Centre noted pent-up demand for travel when it unveiled its profit results last month. Some limited international travel between COVID safe countries could resume as soon as the second half of this calendar year.
This could drive a big increase in Flight Centre's profits, particularly as it now has a leaner business after undertaking massive cost cutting.
Macquarie's 12-month price target on the Flight Centre share price is $20 a share.
Value doesn't lose lustre
Another ASX share that scored an upgrade is the Evolution Mining Ltd (ASX: EVN) share price. Citigroup lifted its recommendation on the gold miner to "buy" from "neutral".
The bullish change may raise a few eyebrows as the gold price is slumping. In fact, the broker believes that the precious metal has passed its peak this cycle and won't be challenging last year's record of over US$2,000 an ounce anytime soon.
Citi lowered its 2021 calendar year forecast for gold to US$1,800 an ounce from US$1,900 an ounce.
ASX gold share upgraded to buy despite weaker gold outlook
But gold doesn't need to keep climbing for there to be value in the ASX gold sector.
"Key picks are stocks that are positioned to generate cash through cycle, optionality to deliver volume growth and those with upcoming news flow," said Citi.
"We note ASX gold equities have underperformed physical gold by ~10% over the past few months."
Citi's 12-month price target on the Evolution share price is $4.80 a share.
