2 ASX All Ordinaries shares top brokers rate as buys

Here are the latest buy-rated shares from two leading brokers.

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Investors looking for buying opportunities during these volatile times have two ASX shares on the All Ordinaries Index (ASX: XAO) to consider.

These ASX companies are the latest buy-rated shares from leading brokers and both shares are outperforming today.

The All Ordinaries share to buy for its market-beating potential

The first is the Endeavour Group Ltd (ASX: EDV). Shares in the hospitality group have been in the green all day and are trading 2% higher at $7.74 at the time of writing. In comparison, the All Ords has gained 0.28%.

According to JPMorgan, there’s still more room for the Endeavour share price to run. The broker initiated coverage on the shares with an ‘overweight’ recommendation and an $8.60 per share price target.

The optimism stems from the broker’s belief that the market is underestimating the group’s earnings potential over the next few years. Said JPMorgan:

Our EPS [earnings per share] forecasts are 5% and 6% ahead of Bloomberg consensus in FY23 and FY24, respectively, due to the reinvestment in the hotel network and continued strength in the retail drinks business.

This price target implies a 24.6x FY24 PER, underpinned by the market-leading position of the retail and hotels business, both of which have a deep moat and earnings growth optionality, which justifies a premium to the market, in our view.

Worth adding to your shopping list

Meanwhile, the Universal Store Holdings Ltd (ASX: UNI) share price is also outperforming today. Shares in the fashion retailer rallied 3.5% to $4.66 at the time of writing.

The rally coincides with Citigroup’s decision to start coverage on Universal shares with a ‘buy’ recommendation.

The broker’s optimism is based on the view that the Universal Store share price has several medium-term growth drivers.

These include new store rollouts and margin expansion opportunities. These drivers could see the retailer generate a 10% CAGR for its earnings per share from FY21 to FY24.

Citigroup said:

Universal’s store rollout target of 100+ across ANZ appears to be conservative given our analysis indicates potential for the company to roll out 110 stores.

We forecast Universal’s EBITDA margin to expand ~100 bps over FY21 to FY25e, driven by new stores reaching maturity, increasing private brand penetration, higher levels of direct sourcing and scale benefits.

The broker’s 12-month price target on the Universal Store share price is $5.83 a share. The retailer is also forecast to pay a 27.1 cents a share dividend in FY23.

Motley Fool contributor Brendon Lau 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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