2 top ASX shares that could be excellent buy and hold options

These ASX shares could be top buy and hold options…

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There are a lot of shares to choose from on the Australian share market.

In order to narrow things down for investors, listed below are two ASX shares that are rated highly by analysts. Here’s why they could be top buy and hold options:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The first ASX share that could be a top buy and hold options is this pizza chain operator.

While Domino’s is having a reasonably tough time at the moment, its long term outlook remains very positive. This is being underpinned by the popularity of its offering and its bold expansion plans. In respect to the latter, despite already having a huge network across several regions, Domino’s sees scope to more than double its footprint again over the next decade.

And this is just from existing markets. It also has the balance sheet strength to make acquisitions that increase its addressable market.

The team at Morgans remain positive on the company and believe recent share price weakness is a buying opportunity.

The broker commented: “We upgraded to ADD after the result and, although inflationary pressures have worsened since then, we continue to believe there is meaningful upside to the current share price over the next 12 months.”

Morgans has an add rating and $100 price target on the company’s shares.

TechnologyOne Ltd (ASX: TNE)

Another ASX share that could be a quality buy and hold option is TechnologyOne.

It is an enterprise software provider servicing the government, financial services, health and community services, education, and utilities and managed services markets.

It could be a top option due to its recent transition to a software-as-a-service (SaaS) model with its enterprise resource planning (ERP) solution. This shift of focus has been going very well, with the company recently reporting stellar SaaS annual recurring revenue (ARR) growth with its half-year results.

Pleasingly, management doesn’t expect its growth to stop any time soon and is targeting $500 million+ in ARR by FY 2026. This is up from its current base of $288 million.

Analysts at Goldman Sachs suspect that TechnologyOne could even outperform this target, noting that the risks are to the upside. It said: “SaaS flip uplift, elevated inflation (via contractual CPI pass-through) and underlying business growth underpin our A$505mn FY26 ARR estimate, and we think risks are skewed to the upside with our estimates assuming modest organic growth ex-flip (~10%).”

Goldman has a buy rating and $13.30 price target on the company’s shares.

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 Dominos Pizza Enterprises Limited. 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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