Looking for some new additions to your investment portfolio? If you are, then it could be worth hearing what Morgans is saying about the two ASX shares listed below.
Here's why the broker is bullish on these names:
Jumbo Interactive Ltd (ASX: JIN)
This online lottery ticket seller could be an ASX share to buy according to the broker.
Morgans notes that Jumbo has had a subdued start to FY 2025. It said:
JIN hosted its AGM on Friday, providing a softer trading update that highlighted a 'subdued start' to FY25. This was unsurprising, given the prolonged period of jackpot fatigue and challenging comps with the pcp. TTV and revenue were down 5% and 8% respectively for the first four months of FY25. While 1Q25 held up well, the real weakness came in October, with only two large jackpots (LJP) >= $15m compared to 17 in the same period last year. Those 17 jackpots had an aggregate value of $590m, vs. just $50m currently. The company reaffirmed targets and stated it is working to keep EBITDA margins in line with its August guidance.
Nevertheless, the broker remains very positive on Jumbo and sees now as an "ideal" time to invest in its shares. It explains:
Following the AGM address and trading update we have trimmed our expectations to reflect a lower number of large Division 1 jackpots offset by weaker margins, updating our multiples-based valuation as well as updating FX assumptions. This stock tends to trade on jackpotting draws, and we see the current setup as an ideal time to initiate or add to a position.
Morgans has an add rating and $15.80 price target on its shares.
Universal Store Holdings Ltd (ASX: UNI)
Another ASX share that gets the thumbs up following its annual general meeting update is youth fashion retailer Universal Store.
Commenting on its "impressive" start to the year, the broker said:
At its AGM, UNI provided a trading update for the first 17 weeks of FY25 with total direct to consumer (DTC) sales up by an impressive 19.3% on the pcp. LFL sales in Universal Store and Perfect Stranger accelerated in the last 10 weeks from the first 7 weeks, whilst sales moderated in CTC THRILLS DTC business and wholesale demand (ex-Universal Store) remains volatile. Gross margins have been well managed, in our view, and improvements made in 2H24 have continued into FY25 driven by mix (increased private label penetration).
And while its costs are increasing, this isn't enough to put off Morgans. It adds:
Costs as a percentage of sales have increased YTD yoy which is due to investment in headcount as well as capability for implementation of new ERP and POS system. We have made modest increases to our earnings forecasts up 2% in FY25 and 3% in FY26 respectively.
Morgans has an add rating and $8.75 price target on its shares.
