The team at Morgans has been busy running the rule over a number of ASX stocks this week.
Three that have fared well and been given buy ratings are listed below. Here's why the broker is bullish on these names:
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CSL Ltd (ASX: CSL)
This biotherapeutics company's shares could be "materially undervalued" according to the team at Morgans.
The broker highlights that this high-quality company is trading on significantly lower than normal multiples at present. This is despite many analysts forecasting double-digit earnings growth in the coming years.
Commenting on the ASX stock, the broker said:
We view CSL as materially undervalued, trading on an EV/EBIT of 18.2x, more than 25% below its 10-year average (24.7x). Based on a conservative SOTP valuation, we estimate fair value of A$196bn, implying c35% upside from current trading levels. Notably, the market appears to be valuing CSL on less than a single division, with a c10% discount to the core Behring business alone, while effectively assessing zero or negative value to Seqirus and Vifor. We adjust our underlying earnings estimates lower by c4%, mainly on lower sales assumptions in Seqirus and Vifor.
Morgans has a buy rating and $303.70 price target on its shares.
Regal Partners Ltd (ASX: RPL)
Another ASX stock that gets the seal of approval from Morgans this week is fund manager Regal Funds.
Its analysts believe the company's shares are great value at current levels. Especially given its strong balance sheet and growing funds under management (FUM). It said:
In this note we update our earnings estimates to reflect 1HCY25 performance fees, along with our expectations for a slight moderation in the funds management margin and an increased non-controlling interest charge (vs prior expectations). Trading at a PER of 14x (CY26), with a strong balance sheet and capacity to continue growing FUM, we retain our Add rating with a price target of $3.30/sh.
Morgans has an add rating and $3.30 price target on Regal Partners' shares.
Tyro Payments Ltd (ASX: TYR)
A third ASX stock to have been given a buy rating this week is payments company Tyro Payments.
The broker believes that proposed changes to card surcharges are not going to impact Tyro's profitability. As a result, it feels that recent share price weakness is a buying opportunity.
The Reserve Bank of Australia (RBA) has released a Consultation Paper as part of its Review of Merchant Card Payment Costs and Surcharging. With management adamant the regulatory changes won't impact TYR's profitability, we think risks from surcharging changes have been overstated. We make no alterations to our earnings or price target in this note. We continue to see TYR as unvalued and with >20% upside to our PT (A$1.55), we maintain our BUY recommendation.
Morgans has a buy rating and $1.55 price target on its shares.
