Morgans has been running the rule over a number of ASX shares this week.
Listed below are two that it rates as buys and one that it thinks investors should be accumulating.
Let's see what it is recommending to clients:
Acrow Ltd (ASX: ACF)
This construction services company's shares have been named as a buy by Morgans with a $1.28 price target.
The broker was encouraged with its recent trading update and highlights its positive growth outlook and generous dividend yield as reasons to buy. It explains:
ACF's trading update was encouraging. While FY26 revenue and underlying EBITDA guidance was reaffirmed, management commentary pointed to improving activity levels across Australia. This was particularly pleasing in the QLD formwork division, which has experienced softer conditions over the past two years. Momentum in QLD appears to be turning, with improvement evident heading into FY27. Initial FY27 guidance was a positive surprise. While broadly in line with consensus, we view the early guidance as conservative and achievable, reflecting management's confidence in the outlook.
We maintain our positive view on ACF with a BUY rating and $1.28 target price. With formwork activity – particularly in QLD – now improving, momentum into FY27 continues to build. With Brisbane Olympics-related activity also expected to ramp up over the next 12-18 months, we see ACF's outlook as strong. Trading on 8.6x FY27F PE with a 6.0% yield, we believe the valuation remains attractive.
Beetaloo Energy Australia Ltd (ASX: BTL)
Another ASX share that Morgans is positive on is energy explorer Beetaloo Energy. The broker has a speculative buy rating and 90 cents price target on its shares.
It highlights the deep discount that the company trades on, which leaves material upside for investors. The broker said:
The INPEX/Formentera Beetaloo JV terms imply US$3,059/acre at base earn-in, escalating to US$3,547-$5,480/acre on option exercise, a 20-37x uplift on the prior Tamboran/DWE benchmark in 2025. BTL trades at an implied ~A$140/acre, a 97% discount to the INPEX base deal. Even heavy discounting for acreage quality differences leaves material upside. INPEX has committed development-scale capital (up to US$619m) to the Beetaloo as an LNG-grade resource. Farm-out leverage for BTL has stepped up materially. We maintain our Spec Buy rating, with an upgraded A$0.90 TP.
PEXA Group Ltd (ASX: PXA)
After a sharp decline this week, Morgans has reaffirmed its accumulate rating on this property settlement company's shares with a $14.31 price target.
The broker remains positive on PEXA despite concerns on future pricing following the release of a paper from IPART. It explains:
IPART has released a methodology paper outlining its proposed approach to calculating an Initial Asset Base (IAB), which has direct implications for the pricing of Electronic Lodgment Network Operators (ELNOs). While this is just a discussion paper, it certainly points to a likely more rigid structure controlling PXA's future pricing, while elements such as the potential exclusion of goodwill from IPART's proposed IAB calculation could present downside risk.
We make nominal changes to our PXA earnings of -1%-2% on some post results earnings tweaks. While it is too early to factor in the full implications of the pricing review, we now apply a 15% discount to our valuation to account for potential regulatory risk, setting our price target at A$14.31. We maintain our ACCUMULATE recommendation with >10% upside to our PT.
The post Morgans names 2 ASX shares to buy and 1 to accumulate appeared first on The Motley Fool Australia.
Motley Fool contributor James Mickleboro 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 PEXA Group. The Motley Fool Australia has positions in and has recommended PEXA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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