Morgans name 3 of the best ASX shares to buy in August

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

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The team at Morgans has been busy looking for the best large cap ASX shares to buy in August.

Three that make the list this month are listed below. Here’s why Morgans rates them highly:

Santos Ltd (ASX: STO)

Morgans rates this energy producer highly due to its positive growth outlook and diversified earnings base. This is being underpinned partly by its Dorado operation and the stake in Darwin LNG.

The broker explained:

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.

Morgans has an add rating and $9.30 price target on Santos’ shares.

Treasury Wine Estates Ltd (ASX: TWE)

One of Morgans key picks among its best ideas is this wine giant. Its analysts believe the Treasury Wine share price is attractively priced given the company’s positive outlook. Morgans is expecting strong earnings growth over the coming years. It commented:

TWE owns much loved iconic wine brands, the jewel in the crown being Penfolds. We rate its management team highly. The foundations are now in place for TWE to deliver strong earnings growth from the 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.

Morgans currently has an add rating and $13.93 price target on Treasury Wine’s shares.

Wesfarmers Ltd (ASX: WES)

Another ASX share that Morgans rates highly is Wesfarmers. The broker is a fan of the conglomerate due to its high quality retail portfolio. It also feels that recent share price weakness has created a buying opportunity for patient investors. Its analysts explained:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. While COVID-related staff shortages are proving to be a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the pullback in the share price as a good entry point for longer term investors.

Morgans has an add rating and $58.40 price target on Wesfarmers’ 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 positions in and has recommended Wesfarmers Limited. 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.

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