Why CBA shares are a sell and these ASX shares are a buy

Morgans has given its verdict on a number of popular stocks.

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Key points

  • Morgans suggests selling Australia's largest bank stock due to overvaluation concerns and a subdued growth outlook, potentially leading to underperformance.
  • A major wine producer is recommended as a buy, with expectations of growth driven by leading brands and a strategic buyback initiative to support share prices.
  • A youth fashion retailer is also advised for buying, showing robust sales performance and strong outlook, with positive adjustments to earnings forecasts and target price.

Not sure which ASX shares to buy or sell? Well, to help narrow things down, let's take a look at a few recommendations that Morgans has recently made.

Is it bullish or bearish on these names? Let's find out:

Commonwealth Bank of Australia (ASX: CBA)

Morgans agrees with almost every broker out there and rates Australia's largest bank as a sell with a $100.85 price target. This sell rating is due to valuation reasons and the prospect of CBA shares underperforming in the near term. It explains:

There was no material positive surprise to underwrite CBA's share price strength. 12 month target price lifted 4% to $100.85. We remain SELL rated on CBA, recommending clients aggressively reduce overweight positions given the risk of poor future investment returns arising from the overvalued share price and mid-single digit EPS/DPS growth outlook.

Treasury Wine Estates Ltd (ASX: TWE)

Instead of CBA, the broker thinks that wine giant Treasury Wine Estates could be an ASX share to buy. It has a buy rating and $10.10 price target on its shares.

It feels that its shares are cheap at current levels. Morgans explains:

TWE's FY25 result was in line with guidance, reporting a credible 17% growth in EBITS during a period of macro-economic and category headwinds. TWE is targeting further EBITS growth in FY26, led by Penfolds. We have made modest changes to our forecasts reflecting the disruption associated with a change of distributor in California. While lacking near term share price catalysts given industry and macro headwinds and a CEO transition, trading on an FY26F PE of only 12.7x, we maintain a BUY rating. A$200m share buyback should provide some degree of share price support.

Universal Store Holdings Ltd (ASX: UNI)

Finally, this youth fashion retailer could be an ASX share to buy instead of CBA shares according to Morgans. It has a buy rating with a $10.80 price target on its shares.

It is very positive on its outlook after a strong start to FY 2026. The broker commented:

UNI's FY25 result was slightly below expectations driven by higher costs which offset stronger than expected gross margins. UNI's execution in a tough market has been exemplary, with LFL Universal Store (US) sales up 13%. The strong sales momentum has continued into the start of FY26, despite significantly harder comps, double digit LFL sales in US and Perfect Stranger (PS). We have increased our FY26/27 EBIT forecasts by 1.7%/1.8% respectively driven by higher sales and gross margins, somewhat offset by higher costs. Our valuation increases to $10.80 (from $10.20) and we retain our BUY recommendation.

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates and Universal Store. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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