The recent broad market sell-off has opened the window for investors to buy ASX value shares at discounted prices.
Two stocks stand out: Treasury Wine Estates Ltd (ASX: TWE) and Endeavour Group Ltd (ASX: EDV). According to top brokers, both have strong upside potential and are highly rated.
With the S&P/ASX 200 Index (ASX: XJO) sinking more than 7% this past month, are these two ASX value shares a good fit for your portfolio? Let's take a dive and see.
ASX value shares catch a bid
The first ASX value share is Treasury Wine. The stock has come into trouble these past few months and is down 11% this year to date.
Goldman Sachs upgraded the wine production and marketing company to a buy last month with a price target of $12.90. This suggests a 28% upside from Treasury Wines's closing price on Tuesday.
Goldman says the removal of Chinese tariffs on Australian wine is a big catalyst. Analysts expect the company's sales in China to recover by 63% by 2027.
Treasury Wine's position in the US sees it ranked as "the #1 luxury wine company" in the States. This is based on it having the "most sales" in the luxury category.
Goldman Sachs projects the ASX value share's net profit to grow by 14% per year through to FY27, accompanied by 14.5% compounding dividend growth from 42 cents to 54 cents per share.
This equals a 4.2% dividend yield at the time of writing, boosting the implied total return to 32% over the next year if the broker is correct.
Endeavour Group: A buy on weakness?
Endeavour is the second ASX value share on the list. It, too, has had a difficult start to the year, down nearly 4% after a 9% slump in the past month alone.
Despite this, according to CommSec, the consensus of analyst estimates maintains a buy rating on the drinks retail network.
The consensus price target on the stock is $4.71 apiece, according to Tradingview. This is around 16.5% upside potential from Endeavour's share price before the open on Wednesday.
Endeavour is Australia's largest alcohol retailer, home to well-known liquor retailing brands Dan Murphy's and BWS.
As my colleague James reported, the company has grown its customer base, which now boasts around 4.5 million active members in its My Dan's program under the Dan Murphy's label.
Consensus estimates point to modest earnings growth for the ASX value share out to FY27, growing from 28 cents to roughly 30 cents per share.
Meanwhile, dividends of 21.8 cents apiece are forecast to remain steady across this time horizon.
At current prices, Endeavour trades at just 16 times earnings, meaning investors pay just $16 for $1 of profits in Australia's largest alcohol retailer.
And investors are projected to receive over 5% in dividend yield next year (assuming today's share price).
Foolish takeaway
Both of these ASX value shares have appeal in the eyes of brokers.
Treasury Wine stands out due to its growth potential in China and its position in the US luxury wine market.
On the other hand, Endeavour continues to build market share and is reasonably priced compared to the value on offer.
Combined, both stocks are rated as buys from consensus estimates, so keep an eye out.
