The team at Morgans has been busy looking at which ASX shares investors should be buying following earnings season.
Two that have been given the thumbs up by the broker are listed below. Here's what it is saying:
Flight Centre Travel Group Ltd (ASX: FLT)
The first ASX share that could be a buy in September according to Morgans is travel agent giant Flight Centre.
Morgans has an add rating and a $26 price target on Flight Centre's shares. This implies a potential upside of 32% over the next 12 months.
The broker was pleased with the company's performance in FY 2023 and feels that the coming years could be even better thanks to its transformed business model. It said:
Given we forecast a strong recovery over coming years, we have made only minor changes to our forecasts. However we note that there is substantial upside to consensus estimates if FLT achieves its 2% margin target in FY25. With confidence that the travel recovery has much further to go and the benefits of FLT's transformed business model emerging, we think the company is well placed over coming years. We maintain an Add recommendation.
MotorCycle Holdings Ltd (ASX: MTO)
Another ASX share that has been named as a buy by Morgans is MotorCycle Holdings. It is one of Australia's leading motorcycle dealerships and accessories companies.
Morgans has an add rating and a $2.60 price target on its shares. This suggests a potential upside of 19% for investors from current levels.
The broker notes that the company outperformed expectations in FY 2023. Despite this, its shares still trade on dirt-cheap multiples and offer a very big dividend yield. It explains:
MTO delivered A$23m NPAT (flat pcp), exceeding our expectations and delivering a 6% beat on consensus NPAT (+15% on MorgansF). […] Importantly, MTO pointed to improved trade conditions in the underlying business in 4Q23, which have continued into 1H24. While we assume some further deterioration in the ex-Mojo business in FY24, we expect the rate of this to slow. Additionally, the combined business will benefit from a full 12-month Mojo contribution. MTO continues to screen too cheap on ~6.5x FY24F PE and a ~9.5% yield. Add.
