Brokers think that there are some top ASX shares top buy in May 2021, including global education business Idp Education Ltd (ASX:IEL).
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Brokers believe that there are a few ASX shares that are worthy of investor attention in May 2021.
If several brokers think that the business is a buy then it might be worth looking into. But there’s a possibility that they’re all wrong together.
These two businesses are well liked at the moment:
Idp Education Ltd (ASX: IEL)
This ASX share is rated as a buy by at least five brokers, including UBS which has a price target on the education business of $29.05. That suggests that the return over the next 12 months could be around 30%.
IDP Education is a business that helps people with course applications and visa requirements. It also helps people book and prepare for English language testing. It’s the co-owner of IELTS, the world’s leading English language test for study, work and migration purposes.
UBS thinks that the ASX share will get through COVID and have a better market position, whilst being able to utilise its technology to be better.
The FY21 first half result still showed a decline – revenue was down 29% and net profit was down 49%. However, it showed a recovery through the period. In-fact, by the end of December 2020, testing volumes were broadly in line with those experienced in December 2019.
The board even felt confident enough to pay a dividend of 8 cents per share.
However, the broker UBS pointed out that the COVID situation in India is troubling as the country makes up more than a third of forecast FY21 revenue.
At the current IDP share price, it’s valued at 53x FY22’s estimated earnings according to UBS.
Bapcor Ltd (ASX: BAP)
Bapcor is currently rated as a buy by at least six brokers. One of those brokers is Citi, which has a price target of $9.50. That means the return could be around 25% over the next 12 months.
This business has a number of sector-leading divisions such as Burson and Autobarn.
There are a number of different trends that are helping the ASX share right now. All of the government stimulus and the strong COVID circumstances means that the retail environment is strong for Autobarn. Supply chain disruptions also means that new car supply has been limited. Second hand cars are in high demand and people are also trying to make their own car last longer. That creates a strong market for many of Bapcor’s businesses.
The FY21 result showed a number of strong numbers for Bapcor. It reported revenue grew 25.8% to $883.6 million. Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) grew 36.5% to $145.6 million and pro form earnings per share (EPS) went up 28.9% to 20.7 cents. The dividend was also increased by 12.5% to 9 cents per share.
In the coming years, Bapcor aims to significantly increase its earnings from Asia. It’s growing a network in Thailand and it has also made a large investment into Tye Soon – an auto parts business that has operations across several Asian countries.
Based on the Citi projections, Bapcor is valued at 21x FY21’s estimated earnings.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Idp Education Pty Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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