One of Australia's leading brokers has released its best ideas for the month of June.
These ideas are the ones that Morgans believes offer the highest risk-adjusted returns over a 12-month timeframe and are supported by a higher-than-average level of confidence. Listed below are three ASX shares among its best ideas.
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
Morgans is a fan of this banking giant and currently has an add rating and $34.50 price target on its shares. It remains the broker's preferred pick in the banking sector. It commented:
"We believe ANZ is the most compelling of the major banks on a valuation basis. We expect ANZ to benefit the most of the major banks from the tailwinds currently in place for treasury and markets income. We expect ANZ to continue to focus on absolute cost reduction over the medium term. ANZ has de-risked its loan book over recent years – particularly its institutional loan book – such that the quality of its loan book has increased."
Coles Group Ltd (ASX: COL)
This supermarket operator is another share that makes the broker's best ideas list in June. Morgans currently has an add rating and $18.50 price target on its shares. It said:
"While vaccines are being rolled out across Australia, we think people will continue to spend more time at home due to the risk of COVID flare-ups with the working-from-home trend also likely to stay for some time. This will be beneficial for the major supermarket operators. We continue to prefer COL (~21.5x FY22F PE and 4% yield) over WOW (26x FY22F PE and 3% yield) mainly due to valuation."
Sydney Airport Holdings Pty Ltd (ASX: SYD)
A third ASX share that Morgans rates highly is this airport operator. The broker has an add rating and $7.03 price target on its shares. The broker said:
"Revenues have been badly affected by COVID-19-related government travel restrictions. For the short term SYD is no longer a yield stock (we do not expect it to pay a distribution until 2022/23). It is a capital growth play. SYD remains a premier airport asset whose earnings and thus share price we think will rebound with a recovery in pax (particularly the far more valuable international pax)."
