Do you have room in your portfolio for some new additions this month? If you do, then it could be worth looking at three shares that Morgans is currently tipping as buys.
Let's see what the broker is saying about these ASX stocks in September:
Jumbo Interactive Ltd (ASX: JIN)
Morgans thinks that this online lottery ticket seller could be a top ASX stock to buy. In response to a stronger than expected full year result last month, the broker put an add rating and $16.80 price target on its shares.
Its analysts believe that post-results weakness has created a buying opportunity for investors. They said:
JIN's FY24 result exceeded consensus and our earnings expectations by 2%, driven by an exceptionally strong period in Lottery Retailing, which grew 40% yoy. However, the market was caught off guard by JIN's guidance for softer margins in FY25, primarily due to a slowdown in Stride. This, combined with a slightly more conservative outlook on larger jackpots, leads us to reduce our EPS forecasts by 4% in FY25. Despite this, we believe the market's reaction was excessive. We maintain an ADD rating with a target price of $16.80 (from $17.70).
Megaport Ltd (ASX: MP1)
Another beaten down ASX stock that has caught the eye of Morgans is Megaport. The broker has put an add rating and $12.50 price target on the network as a service provider's shares.
Morgans thinks that its shares are now trading at an attractive level. Particularly if its growth accelerates, as it expects. It commented:
MP1's FY24 result was in line with expectations however FY25 guidance was lower. Our key concern was that investor expectations for FY25 were too high. Guidance has now been provided and is, debatably conservatively, assuming Q4FY24 trends hold into FY25. This has left investors questioning why it sounds like sales are accelerating but the data points and FY25 guidance suggest otherwise. We think expectations are being lowered to the point that if an acceleration in sales occurs, which still seems likely, new investors will get rewarded. We view the risk/reward trade-off as looking better and upgrade to an ADD with $12.50 TP.
Universal Store Holdings Ltd (ASX: UNI)
Finally, a third ASX stock that could be a buy according to Morgans is Universal Store. The broker has an add rating and $8.10 price target on the youth fashion retailer's shares.
It was impressed with the company's performance in FY 2024 and guidance for the year ahead. It said:
UNI reported a strong FY24 result with underlying earnings up 16% on FY23, coming in ahead of pre-released guidance. The strong result could be attributed to sales growth of 9.7%, improved gross margins, up 110 bps to 60.1% and well managed costs. UNI declared a dividend of 18.5c bringing the total to 35.5c which was up 25.6% and ahead of our expectations. The strong momentum seen in 2H has continued into the first 7 weeks of FY25, with double digit like-for-like (LFL) growth across all brands. We have increased our EBIT forecasts by 6% in FY25 and FY26 respectively. We have increased our target price to $8.10 (from $6.95) and retain our ADD recommendation.
