Broker names the best ASX shares to buy right now

Here are three of the best ASX shares to buy according to Morgans…
The post Broker names the best ASX shares to buy right now appeared first on The Motley Fool Australia. –

The team at Morgans has been running the rule over a number of ASX shares once again.

Among its best ideas for May are the shares listed below. Here’s why the broker rates these ASX shares as buys with price targets implying over 20% upside potential:

Santos Ltd (ASX: STO)

If you’re looking for exposure to the energy sector then Santos could be the way to do it. Morgans currently has an add rating and $10.00 price target on the company’s shares.

The broker likes the company due to its diversified earnings base and attractive growth profile. Morgans said:

“We expect the resilience of STO’s growth profile and diversified earnings base see it best placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development. PNG growth meanwhile remains a riskier proposition, with the government adamant it will keep a larger share of economic rents while operator Exxon has significantly deferred growth plans across its global portfolio.”

South32 Ltd (ASX: S32)

Not so keen on energy but looking at resources? Then South32 could be a quality option according to the broker. Especially following the transformation of the mining giant’s portfolio.

Morgans currently has an add rating and $6.10 price target on South32’s shares. The broker explained:

“S32 has transformed its portfolio divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.”

Treasury Wine Estates Ltd (ASX: TWE)

A final ASX share that is rated highly by Morgans is Treasury Wine. It is the wine giant behind a range of brands including Penfolds and 19 Crimes.

Morgans currently has an add rating and $13.93 price target on its shares. Morgans commented:

“TWE owns much loved iconic wine brands, the jewel in the crown being Penfolds. We rate its management team highly. The company recently reported an impressive 1H22 result despite facing a number of material headwinds. The foundations are now in place for TWE to deliver strong double-digit growth from 2H22 over the next few years. Trading at a material discount to our valuation and other luxury brand owners, TWE is a key pick for us.”

The post Broker names the best ASX shares to buy right now appeared first on The Motley Fool Australia.

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Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More reading

The ASX 200 shares that fund managers are buying and dumping
Here’s what makes Santos shares ‘a really exciting proposition’: expert
5 things to watch on the ASX 200 on Tuesday
Broker says the South32 share price is cheap at current levels
The Treasury Wine share price has tumbled 9% in 2022, so is the dividend yield worth its weight?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Limited. 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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