With a number of growth shares being sold off recently as interest rates rise, now could be a good time to look at which ones you want to buy when the market settles down.
Two that analysts at Morgans rate as buys are listed below. Here's what the broker is saying about them:
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Aristocrat Leisure Limited (ASX: ALL)
Morgans is a big fan of this gaming technology company. It highlights that the company has been growing strongly in recent years and expects this trend to continue. Particularly given how it continues to win market share across all product segments. So, with Aristocrat's shares down materially since this time last year, its analysts see this as a buying opportunity for investors. It commented:
The underperformance [of its shares] means, however, that ALL's 1-year forward P/E has derated to less than 20x from a high of 30x last September. With $3.3bn of currently available liquidity, ALL has significant funding capacity for growth, even after the buyback. It has a stated ambition to build a meaningful presence in the rapidly growing online real money gaming segment, which we believe may be achieved both through organic investment and inorganic acquisitions.
Morgans has an add rating and $43.00 price target on the company's shares.
Jumbo Interactive Ltd (ASX: JIN)
Another ASX growth share to consider is lottery ticket seller Jumbo. Morgans likes the company due to its belief that lottery ticket sales are somewhat recession proof. In addition, the broker also sees growth opportunities overseas. It said:
We believe JIN offers excellent strategic growth opportunities, both in Australia and overseas, supported by a steadily expanding domestic market for digital lottery retailing. The business is cash generative and has a low requirement for ongoing capex. Lottery sales are resilient to economic cyclicality. They do not represent a large proportion of the personal budgets, hovering around 0.5% of household discretionary income in Australia. Although near-term sales are affected by the frequency of large jackpots, over time growth is steady.
Morgans has an add rating and $17.50 price target on its shares.
