The recent sharp but short-lived downturn in ASX stocks has created potential buying opportunities in several high-quality stocks, according to analysts at Wilsons Advisory and Bell Potter.
Reserve Bank of Australia (RBA) Governor Michelle Bullock's comments on interest rate policy clamped a comeback rally staged on Tuesday and Wednesday.
Bullock said the RBA board "will not hesitate to raise rates if it needs to" in its quest to fight inflation.
And while the S&P/ASX 200 Index (ASX: XJO) continues to gyrate, these bastion-like brokers see potential in stocks like WiseTech Global Ltd (ASX: WTC), Lovisa Holdings Ltd (ASX: LOV), and James Hardie Industries PLC (ASX: JHX).
Let's see what they have to say.
Brokers reveal 'bargain' ASX stock picks
The ASX 200 has plunged nearly 5% across this past week, driven by a spectrum of factors, including recession fears in the United States. The market has also been volatile today, down around 0.23%
Despite the turmoil, Wilsons Advisory believes fears of a US recession are unfounded. It projects a moderate economic expansion in the world's largest economy instead, according to The Australian Financial Review.
Greg Burke, lead portfolio manager at Wilsons Advisory, noted that the market volatility had been indiscriminate and driven by excessive concerns.
He suggested that the sell-off presented attractive buying opportunities in high-quality ASX stocks.
The current bout of market volatility has been indiscriminate in nature and driven by concerns that are excessive considering broadly benign economic conditions.
The sell-off has the potential to offer up attractive buying opportunities in high quality ASX companies that have been fundamentally oversold.
Wilsons named fashion jewellery retailer Lovisa Holdings in its take, which is looking to cyclical stocks with "structural growth levers". Morgans also rates Lovisa a buy with a price target of $37.00.
Bell Potter agrees with Wilson, stating that the growing likelihood of a significant rate cut by the US Federal Reserve should alleviate market concerns.
Strategist Rob Crookston sent out a note called Bargain Hunt to clients today, highlighting several high-quality, large-cap ASX stocks.
The broker's major pick is WiseTech Global, a leading provider of logistics software. It finished Thursday's session at $87.19 apiece.
This is well behind Bell Potter's price target of $100 per share on the stock.
Bell Potter also named James Hardie as a top pick. The share is down 9% this past week. Bell highlighted the company's strategic execution and potential for cyclical improvement. It values the stock at $53.39 per share.
Meanwhile, Goldman Sachs has a buy rating on the ASX stock with a price target of $57.85.
Foolish takeaway
The recent market volatility has created potential buying opportunities in high-quality ASX stocks.
Analysts at Wilsons Advisory and Bell Potter see fundamentally strong stocks with significant growth potential as attractive picks during market downturns.
As always, conduct your own due diligence and consider your long-term investment goals before making any decisions.
