3 ASX shares to buy and 1 to sell: brokers

Brokers are forecasting these ASX shares could gain 7% to 17% in the months ahead.

| More on:
A young boy points and smiles as he eats fried chicken.

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

Looking to buy ASX shares with strong growth potential?

Below we look at three ASX stocks that brokers are tipping as buys, with potential share price upsides of 7% to 17%.

We also look at one stock that's been downgraded to a sell with a potential 12% share price downside.

(Broker price data, courtesy of The Australian.)

3 ASX shares to buy

The first ASX share to buy, according to Moelis & Company, is Objective Corp Ltd (ASX: OCL).

Shares in the content, collaboration and process management solutions provider are up 2.1% today, trading for $15.05 apiece. That sees the Objective share price up 41% over 12 months. Objective shares also trade on a 1.1% partly franked dividend yield.

And Moelis & Company forecasts some strong ongoing growth potential ahead. The broker has a new buy rating on the stock with a $17.60 price target. That represents a potential upside of almost 17% from current levels.

Moving on to the second ASX share to buy, Dexus (ASX: DXS).

Shares in the Australian property investor, developer, and manager are up 1.8% today, trading for $7.72 apiece. That sees the Dexus share price up 7% over 12 months. Dexus shares also trade on a 6.2% partly franked trailing dividend yield.

Barrenjoey believes this stock can keep rising. The broker raised Dexus to an overweight rating with a price target of $8.25. That represents a potential upside of almost 7% from current levels.

Which brings us to the third ASX share to buy, Collins Foods Ltd (ASX: CKF).

Shares in the KFC and Taco Bell restaurant operator are up 2.0% today at $8.77. The Collins Foods share price is down 4% over 12 months. Collins Foods shares also trade on a 3.2% fully franked trailing dividend yield.

Goldman Sachs is optimistic on the outlook for Collins, with a new buy rating on the stock and a $10.00 price target. That represents a potential upside of 14% from current levels.

The broker noted:

Like many consumer companies, Collins has been unable to escape the rising cost and tough consumer environment which led to recent margin downgrades. However, we consider the outlook to be incrementally more positive with our buy thesis.

Looking ahead, Goldman expects this is an ASX share to buy based on:

  • A moderation of cost growth with wages, poultry, electricity and rent growth moderating, while oils and grains have returned to pre-covid levels
  • Improved discretionary spending in Collins' key states (Qld & WA) and potential for increased Digital sales penetration
  • Netherlands KFC presence reaching scale and improved KFC Europe margins long-term

One ASX stock to sell

Having covered the three ASX shares to buy, Guzman Y Gomez Ltd (ASX: GYG) could be one to sell.

Shares in the Mexican fast food restaurant chain are down 4.6% today at $37.55. That leaves the GYG share price up 25% since 20 June, when shares first began trading on the ASX. The newly listed company does not pay dividends yet.

Goldman Sachs believes GYG shares may have run too high, partly based on overly optimistic market expectations of the growth outlook. The broker rated GYG shares with a new sell and a price target of $33.20. That's a potential downside of almost 12% from current levels.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Objective. The Motley Fool Australia has positions in and has recommended Objective. The Motley Fool Australia has recommended Collins Foods. 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

Female miner in hard hat and safety vest on laptop with mining drill in background.
Broker Notes

Experts reveal 2 buys and 1 sell in the ASX 200 materials sector

And they're not all mining companies, either.

Read more »

A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.
Broker Notes

Why Macquarie expects this ASX All Ords copper stock to soar 48% in a year

Macquarie forecasts another big year of gains ahead for this ASX All Ords copper stock. But why?

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Broker Notes

How much upside does Macquarie expect for Steadfast Group shares?

The broker has given its verdict on this blue chip.

Read more »

Female miner standing smiling in a mine.
Broker Notes

Why Macquarie predicts Pilbara Minerals shares could surge 71%

Macquarie forecasts a big rebound ahead for Pilbara Minerals shares. Let’s find out why.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Broker Notes

The smartest Australian stocks to buy with $250 right now

$250 to invest? Check out these stocks that brokers rate as buys.

Read more »

A woman wearing dark clothing and sporting a few tattoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.
Broker Notes

1 magnificent Aussie stock down 23% to buy and hold forever

Let's see why this could be a top share to buy while it is down.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

Bell Potter says this ASX 200 stock can rise 100%+

Let's see which stock the broker is tipping as a buy to clients.

Read more »