Do you have room in your portfolio for some new additions?
If you do, then it could pay to listen to what analysts at Morgans are recommending investors buy right now.
Two ASX 200 stocks that have just been given the thumbs up from the broker are listed below. Here's why it rates them as buys:
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IPH Ltd (ASX: IPH)
Morgans thinks that this ASX 200 stock is trading on an undemanding valuation.
So, with the intellectual property (IP) services company performing in line with expectations so far in FY 2025, it feels that now is a good time to pick up shares.
In response to its trading update, the broker reaffirmed its add rating and $6.80 price target. This suggests that its shares could rise 32% over the next 12 months. It also expects a fully franked 6.6% dividend yield. Morgans commented:
IPH's trading update was effectively in line with recent earnings trends, with some minor incremental pressures (currency; lower Canada Litigation revenue). 1Q25 like-for-like (LFL) revenue and EBITBA were marginally above the pcp but underlying EBITDA (includes acquisitions and currency) was impacted by negative currency movements.
The currency move in 2Q to-date is favourable. LFL growth was recorded in Australia and Canada (although implied to be subdued), with Asia seeing moderate earnings decline. IPH's valuation is undemanding (~11.5x FY25F PE) but investor patience is required given the delivery of organic growth looks to be the catalyst for a re-rating.
Light & Wonder Inc (ASX: LNW)
Morgans remains positive on this poker machine developer despite its softer than expected third quarter update.
The broker highlights that although Light & Wonder missed expectations, it still delivered its ninth consecutive quarter of double-digit revenue growth.
And with the ASX 200 stock reaffirming its adjusted EBITDA target of US$1.4 billion for FY 2025, Morgans has retained its add rating and $180.00 price target on its shares. This implies potential upside of just under 30%. It said:
Light & Wonder missed consensus earnings expectations in 3Q24, despite delivering its ninth straight quarter of double-digit consolidated revenue growth. Revenue increased 12% yoy to US$817m, in line with MorgansF but 2.3% below consensus. This was driven by continued strength in land-based gaming, which grew 15% yoy, with global machine sales up 38% (MorgansF 26%). Adjusted EBITDA rose 12% to US$319m, falling 2% short of market expectations.
LNW reaffirmed its US$1.4bn Adjusted EBITDA target for 2025. While there was no update on the status of Dragon Train, we find the new FY25 NPATA guidance and earnings growth outlook encouraging, reinforcing our Add rating. Our 12-month DCF and EV/EBITDA-based target price remains at A$180.
