Once a month, the team at Morgans picks out its best ASX share ideas.
These are the ASX shares that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe. They are also supported by a higher-than-average level of confidence.
Among its best ideas for the month of September are the two ASX 200 shares listed below. Here's what the broker is saying about them:
Treasury Wine Estates Ltd (ASX: TWE)
The first ASX 200 share that could be a buy in September according to Morgans is Treasury Wine.
The broker believes the wine giant's shares are great value, particularly given the company's positive outlook. It also notes that its shares could get a big boost if China removes tariffs on Australian wine. It said:
Given TWE's undemanding valuation compared to other luxury brand owners, we see value in TWE. With Penfolds outperforming expectations (makes up ~72% of our valuation) and a clear strategy to improve performance at Treasury America and Treasury Premium Brands, we expect earnings to accelerate from the 2H24 onwards. While risks remain, we back this management team to deliver. The key near term share price catalyst is if China removes the tariffs.
Morgans has an add rating and a $13 price target on its shares.
Westpac Banking Corp (ASX: WBC)
Morgans remains positive on this ASX 200 banking giant's shares despite its poor performance this year. The broker likes Australia's oldest bank due to its attractive valuation and generous dividend yield. It explains:
We endorse an ADD rating for WBC. WBC has a similar asset base, funding mix and domestic retail concentration as the premium priced CBA. However, its growth, profitability and ROE have been significantly weaker than this larger competitor, which is ultimately reflected in WBC's lower earnings and asset-based trading multiples and higher cash yield. If WBC can materially improve its business performance (this is not without significant risk of disappointment) then an investment in its stock could deliver attractive returns as the share price rerates upwards and cash returns to investors lift.
Morgans has an add rating and a $22.58 price target on the bank's shares.