Thanks to positive earnings results, both have received strong ratings from the team at Morgans. 

Here is what the broker had to say. 

HealthCo Healthcare and Wellness REIT

HealthCo Healthcare and Wellness REIT holds a $1.6 billion portfolio of 36 properties including hospitals, aged care, childcare, life sciences and research facilities as well as primary care and wellness assets.

In its HY26 results, the company reported: 

• Revenue from ordinary activities up 6% to $30.5 million
• Revenue, including income from the share of losses/profits of equity accounted investees was down 51% to $14.7 million. 

Additionally, the company could be set to pay a dividend yield of 9%.

Its share price has jumped almost 10% since Monday on the back of this news. 

Following the results, the team at Morgans upgraded this ASX REIT to a speculative buy recommendation. 

This included a price target of $1.05 per share. 

From yesterday's closing price of $0.71, that indicates an upside of 47.8%. 

HCW is edging towards a negotiated resolution for the Healthscope assets. Importantly, rent has been paid in full across the portfolio and HCW has executable agreements with alternative operators for all 11 hospitals – with new long-term leases at unchanged face rents (with incentives), should Healthscope breach the lease. Moderate gearing of 28.5% leaves HCW well-positioned to navigate the uncertain timing and gearing impacts from a managed decline to asset values.

MLG Oz

MLG Oz Ltd is a Kalgoorlie-based integrated mining services and resource asset management company.

It released HY26 Results on Tuesday that included: 

• Statutory Revenue of $287.2 million, up 5.2%, compared to the prior corresponding period (pcp).
• Statutory Net Profit After Tax (NPAT) up 73.2% to $7.1 million (pcp $4.1 million).
• Pro-forma Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) of $36.5 million, up 24.5% on the pcp; pro-forma EBITDA margin of 12.8% (pcp 10.9%).

Its share price climbed higher on these results and is now up 23% year to date. 

In a note out of Morgans, the broker increased its price target following these results to $1.20 (previously $1.00). 

From yesterday's closing price of $1.07, that indicates a further upside of 12.15% for these ASX shares.

1H26 was ahead of expectations at all operating metrics. Earnings grew substantially (EBITDA +25% YoY) despite a relatively subdued top-line (+5%), which is indicative of a steady portfolio of haulage projects and a renewed focus on margins. MLG reinstated dividends which signals confidence in the outlook and the company's financial position.

The post Two ASX shares with big upside post earnings results appeared first on The Motley Fool Australia.

It's important to remember penny stocks can be risky investments because they often represent pre-profit or low liquidity companies. This can come with limited financial transparency, low liquidity, and high susceptibility to price manipulation and extreme volatility.

With that being said, here are two that Morgans has placed attractive price targets on. 

MLG Oz Ltd (ASX: MLG)

MLG Oz Ltd operates within the Australian mining industry. It offers comprehensive supply chain solutions such as crushing and screening, quarry products, and Bulk Haulage & Site Services, and others.

It also reported on Wednesday, which included the following results: 

• Statutory Revenue up 15.5% to $548.3 million, compared to the prior corresponding
• period (pcp).
• Statutory Earnings before interest, tax, depreciation and amortisation (EBITDA) of $66.1
• million, up 19.5% on pcp (FY2024: $53.3 million).
• Statutory Net Profit After Tax (NPAT) up 10% to $12.1 million (pcp $11.0 million).
  
  

Morgans was pleased with the results, and increased its price target to $1.00 (from $0.90). 

From yesterday's closing price of $0.81, this indicates an upside of 23.46%. 

The 2H result was robust with EBITDA of $37m (vs $29m in 1H) on margins of 13.5%. This came despite a lack of meaningful crushing & screening revenue. Rather, the core haulage business performed strongly on the back of a more predictable state of activity in key regions as well as portfolio optimisation (rates) and well-managed utilisation.

This augurs well for FY26, when the company is likely to see a step up in crushing & screening. More generally, MLG has significant opportunities for scope growth with existing gold clients, as well as growth potential in iron ore.

Step One Clothing Ltd (ASX: STP)

Step One Clothing Ltd is a direct-to-consumer online retailer for men's undergarments. Its products comprise Boxer Brief, Trunks, and Boxer Breif+Fly.

On Wednesday, the company reported: 

• Revenue of $86.9 million, up 2.8% on pcp (FY24: $84.5 million)
• EBITDA of $17.4 million, down 3.7% on pcp (FY24: $18.1 million)
• Net profit of $12.7 million, up 2.0% on pcp (FY24: $12.4 million)
• Strong financial position with cash and financial assets of $33.1 million and no debt
• Final dividend of 2.4 cents per share, fully franked; 100% of earnings distributed while
• maintaining capacity to invest in growth
  
  

This sent the company's stock price soaring with gains of approximately 30% over the last two days despite missing expectations. 

At yesterday's close, this penny stock was trading at $0.60. 

Based on these results Morgans decreased its price target on the consumer discretionary share, but still sees upside if the company can execute on its FY26 strategy. 

The broker suggests that if Step One Clothing successfully executes its turnaround strategy, the stock could be worth $0.95, but there's higher-than-normal uncertainty or risk involved in reaching that valuation.

STP's FY25 result missed expectations, gross margins were materially lower driven by increased discounting, somewhat offset by reduced marketing spend. 

STP will use FY26 to reset pricing and promotions, drive new customer acquisition, launch new products and clear excess inventory. We think this is a prudent move to sustain longer-term profitable growth, but lowers near-term earnings. 

Our DCF and EV/EBIT valuation reduces to $0.95. We have a speculative buy recommendation.

The post Earnings season tips: Broker updates guidance on 2 penny stocks appeared first on The Motley Fool Australia.

Not a bad way to make an entrance on the ASX as the new kid on the block!

So what is this new ASX share?

Even though it's only gracing the ASX for the first time today, MLG Oz has been around for almost two decades. It was founded by former truck driver Murray Leahy back in 2002, and today is one of the largest contractors of 'supply-chain solutions' for mining companies, particularly in the Pilbara region of Western Australia.

These 'solutions' range from quarry products, export logistics and bulk transport and haulage services to crushing and screening of ore. According to a report in the Australian Financial Review (AFR) today, MLG also supplies bulk materials like sand, aggregate, cement and lime from a series of quarries the company owns. It also has a fleet of 925 heavy vehicles.

MLG Oz hits the ASX brick road

MLG works with other ASX businesses like BHP Group Ltd (ASX: BHP), Northern Star Resources Ltd (ASX: NST) and Fortescue Metals Group Limited (ASX: FMG).

According to the AFR, Mr Leahy will retain approximately half of the shares on issue for MLG and will stay at the helm of the business as it transitions into a public company. The report also tells us that MLG has forecast revenues of $241 million for 2020-21,  as well as pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) of $41 million.

Around 82% of the company's revenues come from the gold mining sector, with another 14% from iron ore industries and the rest from various other base metals.

MLG has also received interest from some high-profile investors. Chris Ellison, of Mineral Resources Limited (ASX: MIN), has reportedly secured a 0.69% stake in the company. Bill Beament of Northern Star also has a position.

At a listing price of $1 per share, MLG Oz had an approximate market capitalisation of $146 million. Going off of the share price the company has climbed to upon debut, however, I estimate its market cap is now sitting at around $196 million.

The post MLG Oz (ASX:MLG) shares rocket 36% on ASX IPO appeared first on The Motley Fool Australia.