Broker names the best ASX shares to buy right now

Here are three of the best ASX shares to buy according to Morgans…

| More on:
A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The team at Morgans has been running the rule over a number of ASX shares once again.

Among its best ideas for May are the shares listed below. Here’s why the broker rates these ASX shares as buys with price targets implying over 20% upside potential:

Santos Ltd (ASX: STO)

If you’re looking for exposure to the energy sector then Santos could be the way to do it. Morgans currently has an add rating and $10.00 price target on the company’s shares.

The broker likes the company due to its diversified earnings base and attractive growth profile. Morgans said:

“We expect the resilience of STO’s growth profile and diversified earnings base see it best placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development. PNG growth meanwhile remains a riskier proposition, with the government adamant it will keep a larger share of economic rents while operator Exxon has significantly deferred growth plans across its global portfolio.”

South32 Ltd (ASX: S32)

Not so keen on energy but looking at resources? Then South32 could be a quality option according to the broker. Especially following the transformation of the mining giant’s portfolio.

Morgans currently has an add rating and $6.10 price target on South32’s shares. The broker explained:

“S32 has transformed its portfolio divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.”

Treasury Wine Estates Ltd (ASX: TWE)

A final ASX share that is rated highly by Morgans is Treasury Wine. It is the wine giant behind a range of brands including Penfolds and 19 Crimes.

Morgans currently has an add rating and $13.93 price target on its shares. Morgans commented:

“TWE owns much loved iconic wine brands, the jewel in the crown being Penfolds. We rate its management team highly. The company recently reported an impressive 1H22 result despite facing a number of material headwinds. The foundations are now in place for TWE to deliver strong double-digit growth from 2H22 over the next few years. Trading at a material discount to our valuation and other luxury brand owners, TWE is a key pick for us.”

Motley Fool contributor James Mickleboro 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 recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

digital screen of bar chart representing asx tech shares
Technology Shares

Broker names 3 of the best ASX tech share to buy in FY23

These tech shares could be buys in FY 2023...

Read more »

a man wearing a hard hat and a high visibility vest stands with his arms crossed in front of heavy equipment at a mine site.
Broker Notes

Should investors dig the Fortescue share price in July?

Fortescue is suffering in the sell-off. Will things get better in July?

Read more »

3 asx shares to buy depicted by man holding up hand with 3 fingers up
Broker Notes

Broker names 3 of the best ASX shares to buy in July

These three ASX shares are highly rated this month...

Read more »

A white and black clock face is shown with three hands saying Time to Buy reflecting Citi's view that it's time to buy ASX 200 banks
Broker Notes

Brokers name 3 ASX shares to buy today

Brokers are bullish on these ASX shares...

Read more »

Three different hands against a blue backdrop signal thumbs up, indicating share price rise on the ASX market
Technology Shares

Why this top broker just slapped a buy rating on Xero shares

Xero shares could be great value according to Morgans...

Read more »

A businessman lights up the fifth star in a lineup, indicating positive share price for a top performer
Broker Notes

Top broker names 3 of the best ASX 200 shares to buy in FY23

These ASX 200 shares have been named as some of the best shares to buy in FY 2023...

Read more »

a woman sits in comtemplation with superimposed images of piles of gold coins, graphs and star-like lights above her head as though she is thinking about investment options.
Broker Notes

2 ASX 200 shares with enough pricing power to battle inflation: Expert

An expert has tipped Transurban and Resmed shares as potential inflation safe havens.

Read more »

A woman sets flowers on a side table in a beautifully furnished bedroom.
Broker Notes

Is the Adairs share price outlook brightening for July?

Should investors make a home for Adairs shares in their portfolio in July?

Read more »