Two little-known ASX All Ords shares have been raised to a 'buy' rating by Citi.
The broker also significantly boosted its price target for both stocks.
The ASX All Ords shares in question are McMillan Shakespeare Ltd (ASX: MMS) and Smartgroup Corporation Ltd (ASX: SIQ).
Both companies are involved in fleet management, novated lease solutions and salary packaging.
And both are bucking the broader sell-off today.
Following on higher-than-hoped-for inflation data, just released by the ABS, the All Ordinaries Index (ASX: XAO) has given back its morning gains and is down 0.2%.
The McMillan Shakespeare share price is proving resilient, up 3.2% to $16.95 per share. Smartgroup shares are also in the green, up 2.2% at $8.68 per share.
And according to Citi, both ASX All Ords shares could deliver some more sizeable gains in the months ahead.
Image source: Getty Images
Broker upgrades two ASX All Ords shares
As The Australian reports, Citi not only upgraded McMillan Shakespeare to a buy rating, but the broker also increased its price target by 15% to $20.70.
That represents a potential 22% upside from the current share price.
In its quarterly results, released yesterday, McMillan Shakespeare said that strong growth in its novated lease sales contributed to higher-than-expected quarterly earnings.
CEO Rob De Luca attributed the ASX All Ords share's strong earnings to "the ongoing increase in novated lease sales relating to EVs". He said the company has also maintained its novated lease sale of internal combustion engine vehicles at similar levels to the prior corresponding quarter.
EV unit sales represented 36% of the company's new novated lease unit sales in the quarter.
Which brings us to Smartgroup. Atop upgrading the ASX All Ords share to a buy, Citi raised its price target to $9.70 a share. That represents a potential 11% upside from the current price.
Smartgroup reported its half-year results on 24 August.
Revenue for the six months increased by 3% year on year to $117 million. And like McMillan Shakespeare, this ASX All Ords share has also been benefiting from the rise of EVs.
"Leasing demand is robust and electric vehicles are becoming a much larger part of our business," CEO Scott Wharton said at the time.
