Every month, analysts at Morgans pick out their best ASX stock ideas.
These are the ASX stocks that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe. Morgans notes that they are supported by a higher-than-average level of confidence.
Among its best ideas for July are the three ASX stocks listed below. Here's what the broker is saying about them:
Clearview Wealth Ltd (ASX: CVW)
Morgans thinks that Clearview Wealth could be an ASX stock to buy. It is an Australian financial services company offering life insurance, superannuation and investment products and services.
The broker is feeling very positive about the company's outlook. Particularly given its business transformation program, which it expects to support strong earnings. In addition, it highlights Clearview's solid balance sheet and undemanding valuation. It said:
CVW is a challenger brand in the Australian retail life insurance market (market size = ~A$10bn of in-force premiums). CVW sees its key points of differentiation as its: 1) reliable/trusted brand; 2) operational excellence (in product development, underwriting and claims management); and 3) diversified distributing network. CVW's significant multiyear Business Transformation Program has, in our view, shown clear signs of driving improved growth and profitability in recent years. We expect further benefits to flow from this program in the near term, and we see CVW's FY26 key business targets as achievable. With a robust balance sheet, and with our expectations for ~21% EPS CAGR over the next three years, we see CVW's current ~11x FY25F PE multiple as undemanding.
Morgans has an add rating and 78 cents price target on it shares.
Elders Ltd (ASX: ELD)
Another ASX stock that Morgans is bullish on in July is Elders. It is a leading agribusiness company.
Morgans believes that FY 2025 could be the start of a good run of earnings growth for Elders and sees now as the time to buy. It said:
ELD is one of Australia's leading agribusinesses. It has an iconic brand, 185 years of history and a national distribution network throughout Australia. With the outlook for FY25 looking more positive and many growth projects in place to drive strong earnings growth over the next few years, ELD is a key pick for us. It is also trading on undemanding multiples and offers an attractive dividend yield.
The broker has an add rating and $9.00 price target on its shares.
TechnologyOne Ltd (ASX: TNE)
A third ASX stock that Morgans thinks could be a buy is enterprise software provider TechnologyOne.
Its likes the company due partly to its large cash balance and impressive track record of earnings growth. In addition, it suspects that the latter could be about to accelerate. Its analysts said:
TNE is an Enterprise Resource Planning (aka Accounting) company. It's one of the highest quality companies on the ASX with an impressive ROE, nearly $200m of net cash and a 30-year history of growing its earnings by ~15% and its dividend ~10% per annum. As a result of its impeccable track record TNE trades on high PE. With earnings growth looking likely to accelerate towards 20% pa, we think TNE's trading multiple is likely to expand from here.
Morgans has an add rating and $20.50 price target on its shares.
