The team at Morgans has been working hard this month analysing the seemingly endless stream of results that have been released.
Two companies that caught the broker's eyes recently are listed below. Here's why it thinks investors should be buying these ASX shares post-results:
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Accent Group Ltd (ASX: AX1)
The first ASX share that Morgans is tipping as a buy is footwear retailer Accent.
While FY 2022 was a difficult year for the company, the broker was pleased to see that FY 2023 has started positively. And with management aiming to stop discounting and sell at full price, its analysts see scope for margin improvements.
All in all, it feels this makes the Accent share price undervalued at current levels. Morgans has upgraded its shares to an add rating with a $2.00 price target. It commented:
We upgrade from Hold to Add with an increased target price of $2.00. With customer activity showing no signs of a pullback so far in FY23 and with demand for new (and often higher priced) products running strong over the past 8-12 weeks, we have become more positive on the immediate prospects for sales growth.
AX1's renewed focus on selling at full price will, in our view, support a recovery in the gross profit margin in FY23 back towards historical averages. We welcome AX1's moderation of the pace of its store rollout in favour of a more selective expansion strategy focused on return on investment. We see AX1 as undervalued at the current share price.
New Hope Corporation Limited (ASX: NHC)
Another ASX share that Morgans is bullish on is coal miner New Hope. The broker was pleased with its recent update and notes that coal prices continue to surprise to the upside.
In light of this and the strong free cash flow the company is generating, it suspects that a re-rating could be in order in the near future. Particularly given its favourable dividend outlook.
Morgans has retained its add rating with an improved price target of $5.50. It commented
4Q Production/Sales were more resilient to disruption than we had feared. Coal prices continue to surprise, driving further EPS/ valuation upgrades. Valuation/target adjusts to (login to view). We think NHC can re-rate as the market awakens to the sheer scope of current cash flows and ongoing dividend upside potential. ADD.
