Are you on the lookout for ASX growth shares to buy? If you are, then take a look at the two below that Morgans rates as strong buys.
Here's what the broker is saying about them:
Image source: Getty Images
Aristocrat Leisure Limited (ASX: ALL)
Morgans is a big fan of this gaming technology company. This is due to its positive long-term growth outlook, strong cash conversion, and its sizeable funding capacity.
The broker explains:
We have three key reasons for being positive on ALL. They are: (1) long-term organic growth potential. ALL is better capitalised than many of its competitors and has what we regard as a strong platform to continue investment in design and development in both its land-based gaming and digital businesses; (2) strong cash conversion and ROCE. ALL is a capital-light business despite its ongoing investment in Gaming Operations capex and working capital. It has a high level of cash conversion and ROCE; and (3) strong platform for investment. ALL has funding capacity for organic and inorganic investment in online RMG, even after the recent buyback. Its current available liquidity is $3.8bn.
Morgans currently has an add rating and a $45 price target on the company's shares.
Treasury Wine Estates Ltd (ASX: TWE)
Another ASX growth share that Morgans is bullish on is Treasury Wine.
The broker thinks the wine giant's shares are undervalued at the current level given its belief that its earnings growth is about to accelerate. It said:
Given TWE's undemanding valuation compared to other luxury brand owners, we see value in TWE. With Penfolds outperforming expectations (makes up ~72% of our valuation) and a clear strategy to improve performance at Treasury America and Treasury Premium Brands, we expect earnings to accelerate from the 2H24 onwards. While risks remain, we back this management team to deliver. The key near-term share price catalyst is if China removes the tariffs.
Morgans has an add rating and a $14.15 price target on Treasury Wine's shares.
