ASX penny stocks are typically young, micro-cap shares. These can be more volatile than larger, more established shares, and many of these companies are pre-profit.
However, many of the large-cap companies we consider blue-chip stocks today once started out as humble penny stocks.
Following earnings season, brokers have updated their guidance on plenty of ASX shares, including penny stocks.
Here are two that have attracted optimistic price targets from broker Morgans.
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Peoplein Ltd (ASX: PPE)
Peoplein is a workforce solutions company operating in Australia and New Zealand. The company's services include recruiting, contracting, onboarding, rostering, timesheet management, payroll, and workplace health and safety management.
According to Morgans, FY25 was a challenging year for the company, with normalised EBITDA down 10% (vs pcp).
The broker said that while several operational metrics look to be stabilising, the result was light on forward guidance, although management did note that it remained well-positioned to benefit from a potential Queensland infrastructure boom.
On Monday, Morgans said that this ASX penny stock's financial position is getting stronger, with debt down to $27.4 million.
The stock looks comparatively cheap, trading at about 9 times earnings, and profits may be near their lowest point, suggesting potential for improvement.
To this end, we see earnings growth driving share price appreciation through FY27/28, with any turnaround unlikely to be visible until 4QFY26. Hence we reiterate our Speculative Buy rating with a $1.00/sh price target.
Should this penny stock reach the $1.00 price target, that would be a 42% rise from yesterday's closing price of $0.70.
Kina Securities Ltd (ASX: KSL)
Kina Securities provides diversified financial products and services. The company offers banking services, personal and commercial loans, money market operations, provision of share brokerage, fund administration, investment management services, asset financing, and corporate advice.
The company delivered 1H25 results in line with Morgans' predictions.
Its 1H25 underlying NPAT (A$57m) was +16% on the pcp.
Morgans described this as a clean, solid result. The only slight negative was that underlying cost growth remained high (+10% on the pcp), but this was matched by revenue growth.
The broker has lowered FY25F/FY26F EPS by 1% to 5% on slightly higher cost growth than previously forecast.
Despite this our valuation rises to A$1.67 (previously A$1.46) with our earnings changes offset by a valuation roll-forward, we maintain our BUY recommendation.
From yesterday's closing price of $1.32, this indicates an upside of approximately 26% for this ASX penny stock.
