Morgans names the best ASX 200 shares to buy in October

Morgans thinks strong returns could be on offer with these top ASX 200 shares.

| More on:
A woman sits at her desk thinking. She is surrounded by projections of world maps on various screens with data appearing below them.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Once a month, the team at Morgans picks out its best ASX share ideas.

These are the ASX shares that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe. They are also supported by a higher-than-average level of confidence.

Among its best ideas for the month of October are the two ASX 200 shares listed below. Here's what the broker is saying about them:

Pilbara Minerals Ltd (ASX: PLS)

The first ASX 200 share that Morgans rates as a best idea is lithium miner Pilbara Minerals. Its analysts like the company due to its very positive growth profile and strong cash generation. The broker highlights that the latter provides potential for special dividends and buybacks. It explains:

We rate PLS as our best pick of the pure-play lithium stocks. It is well funded, has a long resource life and is an established Australian operator with multiple growth options ahead of it. We think FY24's starting cash balance of over $3.3bn combined with strong operating cashflow will allow the company to pursue a meaningful capital management program while simultaneously funding growth. Updates on the company's downstream growth strategy are expected later this half which will guide towards the potential scope of special dividends and / or buy backs.

Morgans has an add rating and a $5.60 price target on the company's shares.

ResMed Inc (ASX: RMD)

Morgans also believes that investors should be taking advantage of a sharp pullback in the ResMed share price following concerns about the emergence of obesity drugs such as ozempic. It commented:

While weight loss drugs have grabbed headlines and investor attention, we see these products having little impact on the large, underserved sleep disorder breathing market, and do not view them as category killers. Although quarters are likely to remain volatile, nothing changes our view that the company remains well placed and uniquely positioned as it builds a patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.

Morgans has an add rating and a $36.95 price target on the ASX 200 share.

Motley Fool contributor James Mickleboro has positions in ResMed. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

A female ASX investor looks through a magnifying glass that enlarges her eye and holds her hand to her face with her mouth open as if looking at something of great interest or surprise.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Broker Notes

These ASX 200 shares could rise 50% to 60%

Brokers believe these shares could deliver big returns for investors.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Woman with a scared look has hands on her face.
Broker Notes

Bapcor shares fell more than 30% yesterday. Should investors buy in the dip?

Is this a value opportunity?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Broker Notes

Broker raises price targets on 2 ASX 200 shares to buy

Ord Minnett has just upped its 12-month share price targets on 2 buy-rated ASX 200 stocks.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Broker Notes

Morgans says these ASX can rise 30% to 50%

The broker has good things to say about these shares.

Read more »

Two businessmen look out at the city from the top of a tall building.
Broker Notes

2 ASX REITs to buy in July: expert

Is it time to consider ASX REITs?

Read more »

Delighted adult man, working on a company slogan, on his laptop.
Broker Notes

Broker tips 20% upside for these ASX utilities shares

Bell Potter sees upside in these two shares.

Read more »