Although the world is preoccupied with inflation and interest rates, the ASX reporting season is chugging along in earnest.
Fortunately, Morgans equity strategy analyst Andrew Tang has been keeping an eye on the action.
In his "best calls to action" column this week, Tang has helpfully picked out four ASX shares that investors should jump on right now on the basis of their financial reporting this month:
'Business performing well'
Liquor retail and hospitality provider Endeavour Group Ltd (ASX: EDV) understandably struggled during COVID-19 lockdowns and restrictions.
But, according to Tang, the latest update showed it was "getting back to normal".
"Endeavour's 1H23 result was comfortably ahead of expectations with retail margin performance the key standout," Tang said on the Morgans blog.
"Both segments delivered earnings and margins ahead of our expectations. Group ROFE [return on funds employed] increased 80 basis points to 12.2%."
The Endeavour share price has already rocketed 14% year-to-date. But Morgans was so impressed with the February report that it has upgraded its rating to "add".
"The result highlighted management's ability to control costs despite inflationary pressures," said Tang.
"While the regulatory environment remains uncertain, on balance, we think the risks lie to the upside with the underlying business performing well."
'Both potential price upside and reasonable yield'
Freight rail operator Aurizon Holdings Ltd (ASX: AZJ) has opposite fortunes, with the share price dropping more than 10% over the past few days.
Tang reported that its results were not flattering.
"1H23 earnings (EBITDA -7% on pcp, earnings per share -34%), cashflow, and dividend per share (-33% on pcp) were below expectations, and FY23 EBITDA guidance was downgraded 4%."
But the lower share price now means "attractive valuation metrics" and a chance of a rebound "as the market digests the one-offs affecting FY23".
"We think there is both potential price upside and reasonable yield at the current share price — more attractive looking into FY25F."
'Sufficient upside' to buy
Electronics retailer JB Hi-Fi Limited (ASX: JBH)'s reporting had no surprises, as it largely revealed what was to come in a preannouncement in January.
But with the share price now down slightly since late last month, Tang reiterates the add rating from his team.
Tang reported that Beach Energy Ltd (ASX: BPT) released a "soft" first-half result due to "cost increases and production declines".
"Guidance for FY23 has been downgraded with production reduced by 7% and field operating costs up by 12%."
But the Morgans team still has a buy rating on the oil and gas producer.
"We still see sufficient upside," he said.
"FY24 production guidance [is] to be provided at the full year result."
The Beach Energy share price is 4% lower than it was a year ago.
