Share prices and earnings are always changing and this gives investors the opportunity to buy an undervalued ASX share.
It can be particularly attractive to invest in growing businesses because rising profits are a natural tailwind for capital growth, we just need to buy them at the right valuation.
The broker UBS currently has a buy rating on the following ASX shares.
Image source: Getty Images
Sigma Healthcare Ltd (ASX: SIG)
Sigma is Australia's largest pharmacy franchisor and wholesaler, operating under the brands of Chemist Warehouse, Amcal and Discount Drug Store, as well as 3,500 wholesale customers. It has more than 80 international stores across New Zealand, Ireland and UAE.
UBS has a buy rating on the business, with a price target of $3.40.
The broker is expecting Sigma Healthcare's earnings per share (EPS) to increase at a compound annual growth rate (CAGR) of 15% between FY26 and FY29.
UBS suggests Chemist Warehouse's like-for-like sales are going to grow by 13.2% in FY26, 10.2% in FY27 and high single digits between FY28 and FY30.
The broker points to a number of tailwinds including an ageing population, health prioritisation, higher value medicines, greater category participation and spending per consumer, more than 30 stores opening per year and the international growth potential. The profit margins are also projected to steadily climb over the next few years.
Ventia Services Group Ltd (ASX: VNT)
The next ASX share is Ventia. It provides essential infrastructure services across ANZ, specialising in long-term operation, maintenance and management of critical infrastructure.
UBS has a buy rating on the ASX share, with a price target of $6.23.
The broker notes that Ventia's earnings growth has been driven by key contract wins and renewals, as well as expanding its profit margins though exposure to more specialised, higher value work.
UBS suggests that increased infrastructure investment provides a growing market opportunity for the business, combined with balance sheet deleveraging, underpins its forecasts that EPS could grow at a CAGR of 9% over the next three years.
The broker suggests that dividends per share could rise every year between FY26 to FY29.
Collins Foods Ltd (ASX: CKF)
Collins Foods is a large KFC franchisee business, with operations in Australia and Europe (the Netherlands and Germany).
UBS rates the ASX share as a buy, with a price target of $13.10.
The broker noted that Collins Foods' value proposition is resonating with consumers, pointing out that not many Australian consumer-facing businesses recorded an improvement in like-for-like sales in the last few months of 2025.
Conditions in Europe are more challenging, but the company could benefit from the reversal of avian flu impacts that were felt in recent times. It could also benefit from changes to VAT in Europe, which may lead to year-over-year growth of operating profit (EBITDA).
UBS said it continues to like the ongoing strength within the Australian KFC business, combined with the "penetration opportunity" within Germany.
Currently, the Collins Foods share price is valued at 21x FY26's estimated earnings, according to the UBS projection.
