If you're wanting to strengthen your portfolio with some quality ASX 300 shares, you may want to look at the two listed below.
Both have recently been named as buys by leading brokers. Here's why they could be buys:
TechnologyOne Ltd (ASX: TNE)
The first ASX 300 share to buy and hold could be enterprise software provider Technology One.
It has really caught the eye in recent years thanks to its ongoing transition to a software-as-a-service (SaaS) focused business. This transition has been very successful so far and management appear confident this positive trend will continue in the coming years. So much so, the company is aiming to almost double its annual recurring revenue (ARR) to $500 million by FY 2026.
The team at Bell Potter is very positive on Technology One and believes it could achieve its target a year earlier than planned. As a result, it suspects that a guidance upgrade could be coming in the near future. It said:
We also continue to forecast total ARR of $385m, $452m and $535m at the end of FY23, FY24 and FY25. That is, we already forecast Technology One will achieve its $500m+ total ARR target in FY25 and hence why we expect the company to bring forward this target by a year at some stage this calendar year.
Bell Potter currently has a buy rating and $17.00 price target on its shares.
Temple & Webster Group Ltd (ASX: TPW)
Another ASX 300 share that could be a great buy and hold option is Temple & Webster. It is Australia's leading pure-play online retailer of furniture and homewares.
Goldman Sachs is a big fan of the company due to its huge long term market opportunity.
The broker highlights that Temple & Webster has a leadership position in a retail category that is still only in the early stages of shifting online. In addition, it believes the company is well-placed due to the category's high barriers to entry and its specialised approach to e-commerce. It explains:
We see a long term structural growth opportunity driven by increasing online penetration and consolidation of online market share. We think TPW is best placed to be a winner in a category that favours scale players, requires a specialist approach to e-commerce and logistics, has higher barriers to entry vs. other categories.
In response to the company's trading update this week, the broker has increased its EBITDA compound annual growth rate (CAGR) estimate to 23.6% between 2022 and 2025.
Goldman has a buy rating and $6.40 price target on the company's shares.
