If you have money to put into the share market in July, it could be worth hearing about the ASX stocks that Morgans is recommending to clients.
Especially given that it believes they could rise at least 30% from current levels. Here's what you need to know about them:
Image source: Getty Images
Alliance Aviation Services Ltd (ASX: AQZ)
This aviation services company's shares could be undervalued according to the broker.
It was pleased to see that the company has recently announced two transactions that have helped reduce its debt load meaningfully. It said:
AQZ recently announced two significant aviation services transactions. Both transactions have no impact on FY25 earnings guidance. The AVIAN E190 inventory transaction was included in FY25 net debt guidance. However, the engine sale was not, given previous expectations were for completion in FY26. We have therefore reduced our FY25 net debt forecast to A$390m from A$428.5m. Our FY26 net debt forecast is unchanged at A$360m. Our FY25 NPBT forecasts are unchanged. We have reduced FY26/27F NPBT by 3.3%/0.9% due to fewer aircraft now being in the operational fleet.
Morgans has a buy rating and $3.80 price target on its shares. Based on its current share price of $2.59, this implies potential upside of 47% over the next 12 months.
Northern Star Resources Ltd (ASX: NST)
Another ASX stock that could be destined to deliver big returns for investors is gold miner Northern Star.
While Morgans wasn't overly impressed with Northern Star's guidance for FY 2026, it remains positive on the investment opportunity here even after reducing its valuation meaningfully. It said:
FY26 guidance was outlined, with unit costs and capex materially above both Morgans and consensus forecasts. We expect a step-up in sustaining capital will be guided to align with the updated unit cost guidance.
Overall, the update disappointed and reflected in the share price action (–8.6%). FY26 adjustments were poorly flagged, with the new AISC midpoint +12% above consensus along with additional growth CAPEX items. We adjust our forecasts in line with updated guidance and reduce our price target to A$21.78ps (previously A$25.32ps). Today's sell-off reflects a rebasing of NST's share price following a strong FY25 performance (aided by the macro). Looking ahead, operational execution and disciplined capital cost control will be key to unlocking further value.
As mentioned above, Morgans has a buy rating and $21.78 price target on the ASX stock. Based on its current share price of $16.49, this suggests that upside of 32% for investors between now and this time next year.
