With growth shares struggling in 2022, readers may be looking for value options instead.
With that in mind, listed below are two top ASX shares which could be candidates for the value-focused investor. They are as follows:
Accent Group Ltd (ASX: AX1)
This footwear focused retailer’s shares could be a great option for value investors. Especially with the Accent share price trading 27% below its 52-week high. This weakness has been driven by concerns over the company’s performance in FY 2022 due to the impact of lockdowns and COVID on its operations.
According to the team at Bell Potter, its analysts have a buy rating and $3.05 price target on the company’s shares. This compares favourably to the latest Accent share price of $2.26.
As for its valuation, the broker is expecting the aforementioned headwinds to have a big impact on Accent’s earnings in FY 2022 before an even bigger rebound in FY 2023. In light of this, it estimates that the company’s shares are changing hands for 21x FY 2022 earnings but just 13.5x FY 2023 earnings. Another positive is Bell Potter’s expectation for a 4% dividend yield this year and then a 6% yield next year.
South32 Ltd (ASX: S32)
Another value share for investors to consider is this mining giant. Although the South32 share price has charged 58% higher over the last 12 months, analysts at Goldman Sachs believe it is still great value. As a result, it has put a conviction buy rating and $4.60 price target on the company’s shares.
Goldman notes that South32’s shares are trading at ~4x its forward EV/EBITDA estimate excluding the yet to complete acquisition of a 45% stake in the Sierra Gorda copper mine in Chile.
It feels this is great value, especially given its expectation for the more than doubling of its EBITDA in FY 2022 and compelling free cash flow yield of ~18% in FY 2022 and ~17% in FY 2023. This is being driven mostly by its exposure to base metals such as aluminium and alumina.
The post These ASX shares could be buys for value investors appeared first on The Motley Fool Australia.
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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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