A number of popular ASX shares released their results last week and Morgans has been busy running the rule over them.
Let's now see if the broker is bullish or bearish on them after updating its estimates and valuations. Here's what you need to know:
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Lovisa Holdings Ltd (ASX: LOV)
Morgans was pleased with this fashion jewellery retailer's half-year results, highlighting that its earnings were comfortably ahead of expectations.
In light of this and a sharp pullback in its share price, the broker feels that a buying opportunity has opened up. It has retained its buy rating with a $36.80 price target. It said:
LOV reported a strong underlying 1H26 result with EBIT up 20.4%, ~6% ahead of our expectations, driven by store network growth and strong gross margins. During the period, the pace of store rollout continued with a net of 64 new stores in the period, bringing the total count to 1,095.
We have increased our EBIT by 3%/1% respectively in FY26/27, driven by higher sales and gross margin offset by higher costs and D&A. We see the pull back in share price as a buying opportunity at ~23x FY27 PE. Our valuation lowers to $36.80 (from $40) and we retain our BUY recommendation.
Rio Tinto Ltd (ASX: RIO)
Morgans described Rio Tinto's full-year results as solid thanks to its copper operations.
However, due to its valuation and concerns over the potential for deal-making at the top of the cycle, the broker has retained its trim rating with a $146.00 price target. It said:
Solid earnings result, albeit flat earnings despite Copper EBITDA doubling. An investment heavy phase, FCF will rise on Simandou/OT ramp. Underlying NPAT US$10.9bn (in line with cons). Final dividend was 254 USc (+1% vs cons). Whether RIO prove sceptics wrong and unlock value from mega deals at the top of the cycle is a key question and risk. We lean towards 'no', as in our experience M&A action in bull markets pushes listed targets beyond fair value.
RIO is keeping pace with the upgrade cycle, which supports gains but undermines our view on further value, although it remains one of the highest quality sector exposures. We maintain a TRIM rating on RIO with a valuation-based A$146 target price (previously A$142).
Wesfarmers Ltd (ASX: WES)
Finally, Bunnings and Kmart owner Wesfarmers delivered a better than expected half-year result.
Despite this, Morgans feels that Wesfarmers shares are overvalued at current levels. As a result, it has maintained its trim rating with an $80.50 price target. It explains:
WES's 1H26 result was better than expected with productivity and efficiency improvements a key highlight. Earnings for all divisions except Industrial & Safety were either in line or above our forecasts. WES noted that despite a modest improvement in consumer demand, higher costs continued to weigh on many households and businesses, while residential construction activity remains subdued.
We adjust FY26/27/28F group EBIT by +2%/+1%/+1%. Our target price rises slightly to $80.50 (from $79.30) and we maintain our TRIM rating with a 12-month forecast TSR of -2%. While we continue to view WES as a core long-term portfolio holding with a diversified group of well-known retail and industrial brands, a healthy balance sheet, and an experienced leadership team, trading on 30.7x FY27F PE we continue to see the stock as overvalued in the short term.
