There are a lot of shares to choose from on the Australian share market. To narrow things down, the team at Morgans have picked out a few of their best ideas.
Two that are among this list are named below. Here's why these ASX shares are rated as buys:
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IDP Education Ltd (ASX: IEL)
Morgans is a fan of this student placement and language testing company. After a stellar performance in FY 2022, the broker is expecting more of the same in FY 2023 and in the years to come. This is being underpinned by structural demand and acquisitions.
The broker currently has an add rating and $28.16 price target on IDP Education's shares. It commented:
IEL's recovery (Australia Student Placement) and momentum (other divisions) support the strong growth expected in FY23. Structural demand, market share gains, technology-led client retention, operating leverage and acquisitions (especially IELTs distribution) can see IEL compound growth long-term. Value has emerged, however IEL's near-term multiples see the stock susceptible to short-term volatility.
Incitec Pivot Ltd (ASX: IPL)
Another ASX share that Morgans is urging investors to buy is Incitec Pivot. It is a manufacturer and distributor of industrial explosives, industrial chemicals, and fertilisers to the agriculture and mining industries.
Morgans believes the company is well-placed to benefit from high fertiliser prices and the economic recovery. It also sees potential value creation from its demerger plans.
The broker has an add rating and $3.78 price target on the company's shares. It said:
With fertiliser prices holding at historically high levels and possibly moving higher over coming months given Russia's invasion of the Ukraine, which is increasing gas prices, soft commodity prices and impacting fertiliser supply chains, the fundamentals for IPL are very positive. It is also benefiting from favourable seasonal conditions in Australia. It also has strong exposure to an economic recovery through its explosives business (solid demand for resources and Q&C will benefit from US stimulus packages). IPL believes that its demerger plans of its Fertilisers (Incitec Pivot Fertilisers) and Explosives (Dyno Nobel) businesses to create two separately listed companies on the ASX will create further value for shareholders.
