Looking to buy ASX shares with strong growth potential?
Below we look at three ASX stocks that brokers are tipping as buys, with potential share price upsides of 7% to 17%.
We also look at one stock that's been downgraded to a sell with a potential 12% share price downside.
(Broker price data, courtesy of The Australian.)
Image source: Getty Images
3 ASX shares to buy
The first ASX share to buy, according to Moelis & Company, is Objective Corp Ltd (ASX: OCL).
Shares in the content, collaboration and process management solutions provider are up 2.1% today, trading for $15.05 apiece. That sees the Objective share price up 41% over 12 months. Objective shares also trade on a 1.1% partly franked dividend yield.
And Moelis & Company forecasts some strong ongoing growth potential ahead. The broker has a new buy rating on the stock with a $17.60 price target. That represents a potential upside of almost 17% from current levels.
Moving on to the second ASX share to buy, Dexus (ASX: DXS).
Shares in the Australian property investor, developer, and manager are up 1.8% today, trading for $7.72 apiece. That sees the Dexus share price up 7% over 12 months. Dexus shares also trade on a 6.2% partly franked trailing dividend yield.
Barrenjoey believes this stock can keep rising. The broker raised Dexus to an overweight rating with a price target of $8.25. That represents a potential upside of almost 7% from current levels.
Which brings us to the third ASX share to buy, Collins Foods Ltd (ASX: CKF).
Shares in the KFC and Taco Bell restaurant operator are up 2.0% today at $8.77. The Collins Foods share price is down 4% over 12 months. Collins Foods shares also trade on a 3.2% fully franked trailing dividend yield.
Goldman Sachs is optimistic on the outlook for Collins, with a new buy rating on the stock and a $10.00 price target. That represents a potential upside of 14% from current levels.
The broker noted:
Like many consumer companies, Collins has been unable to escape the rising cost and tough consumer environment which led to recent margin downgrades. However, we consider the outlook to be incrementally more positive with our buy thesis.
Looking ahead, Goldman expects this is an ASX share to buy based on:
- A moderation of cost growth with wages, poultry, electricity and rent growth moderating, while oils and grains have returned to pre-covid levels
- Improved discretionary spending in Collins' key states (Qld & WA) and potential for increased Digital sales penetration
- Netherlands KFC presence reaching scale and improved KFC Europe margins long-term
One ASX stock to sell
Having covered the three ASX shares to buy, Guzman Y Gomez Ltd (ASX: GYG) could be one to sell.
Shares in the Mexican fast food restaurant chain are down 4.6% today at $37.55. That leaves the GYG share price up 25% since 20 June, when shares first began trading on the ASX. The newly listed company does not pay dividends yet.
Goldman Sachs believes GYG shares may have run too high, partly based on overly optimistic market expectations of the growth outlook. The broker rated GYG shares with a new sell and a price target of $33.20. That's a potential downside of almost 12% from current levels.
