Investors with room in their portfolio for some new additions might want to consider the ASX shares listed below.
That's because analysts at Morgans have recently put the equivalent of buy ratings on these shares. Here's what the broker is saying about them:
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GQG Partners Inc (ASX: GQG)
The first ASX share that Morgans is bullish on is investment management company GQG Partners.
The broker believes that recent share price weakness (relating to its Adani investments) has created a buying opportunity for investors. Particularly given that its fund outflows have not been as bad as feared. It said:
GQG's November investment strategy performance ranged from -3.3% to +6.8%, resulting in relatively flat estimated monthly FUM, pre net fund flow impacts. An assessment of some of GQG's FUM shows some outflows likely occurred directly post the Adani news. While there is some near-term outflow risk (including headline risk in the imminent FUM update given previous flow strength), based on fund performance we do not expect this to persist for an extended period. The Emerging Markets (EM) fund (>10% exposure to Adani) outperformed its benchmark by ~1% in November.
Over timeframes 1-5 years, all strategies have outperformed benchmarks meaningfully (ranging ~180bp – 920bp). GQG will implement a A$100m buyback (~1.5% of shares) commencing 6-Dec. Uncertainty on the investment performance impact of the Adani news was high at the onset, but can now be assessed and has been minor to-date (Adani vehicles -11% to +14%; EM outperformance in Nov). There is some outflow risk and Adani news flow risk (if GQG remains invested), but we believe there is solid underlying business strength and value at ~9.5x FY25F PE.
Morgans has an add rating and $2.47 price target on the ASX share. It also expects a dividend yield of almost 9.5% in FY 2025.
Iress Ltd (ASX: IRE)
Now could be the time to buy this financial technology company's shares according to the broker.
Morgans appears to believe that the worst is now behind the company and it is destined to deliver solid growth in FY 2025. It feels that this could underpin a re-rating of the ASX share to higher multiples next year. It explains:
IRE reaffirmed FY24 earnings guidance, expecting to deliver towards the top-end. We expect IRE can deliver growth into FY25, led by further efficiency gains and a de-leveraged balance sheet. Proving up top-line growth initiatives through FY25 will be key to a more sustained/continued re-rate for the stock. Further divestments of non-core and/or underperforming assets are possible in FY25. If executed, this would see gearing <1x EBIT and provide further flexibility.
IRE's near-term growth profile (cost-led) is relatively subdued, however we view the earnings base as more defendable and the strengthening balance sheet starts to provide longer-term optionality. IRE's share price has retreated since the 1H result and we now see sufficient value and upside to valuation. Upgrade to Add.
Morgans has an add rating and $11.20 price target on its shares.
