Three ASX shares to buy right now according to Morgans

The team at Morgans has issued new research reports this week, setting out the case for buying shares in three very different sectors.

They reckon there’s upside of a minimum 28.4% to be had among the trio, with one share, admittedly a speculative buy, tipped to more than double.

Let’s have a look at the companies they like.

Civmec Ltd (ASX: CVL)

Shares in Civmec recently hit record highs and have delivered a return of more than 70% over the past year.

That’s perhaps not a surprise, given the company’s announcement last week that its order book had hit a record high of $1.5 billion.

This followed the company being awarded a further package of work by Iluka Resources Ltd (ASX: ILU) at its Eneabba Rare Earths Refinery in Western Australia.

Civmec was also awarded the major construction contract for Perth Park, “Western Australia’s premier entertainment and sporting precinct on the Burswood Peninsula”.

The company also said:

Civmec has recently secured a number of new awards, panel agreement extensions and new orders across its maintenance portfolio, increasing utilisation at its permanent regional facilities. The Group has also secured packages of work from long-term clients across the lithium, rare earths, critical minerals, iron ore, coal, alumina and hydrocarbons commodities, as well as manufacturing work to be delivered from its Newcastle facility.

The Morgans analyst team said they believed the Iluka and Perth Park contracts “almost entirely de-risks expectations for strong earnings growth in FY27”.

They added:

We expect Civmec to enjoy a strong 12-24 months given increased earnings certainty and an unprecedented outlook supported by capex programs across a broad range of commodities.

Morgans has a price target of $2.30 on Civmec shares compared to $1.79 currently.

IDP Education Ltd (ASX: IEL)

The Morgans team said on the downside, visa data in IDP’s key markets “remains in deep contraction”, with Australia, Canada, and the UK all experiencing material declines.

But on the upside, China is scaling quickly, they said, “and the group continues to demonstrate pricing power across both IELTS and Student Placement”.

IELTS is the globally recognised standard test for English language proficiency.

Morgans said they viewed IDP’s earnings reset as “cyclical rather than structural”.

They added:

Visa restrictions have tightened across all four key destination markets, compressing volumes materially, but underlying demand for international study remains supported by Asian demographics and IDP retains clear market leadership in both IELTS and student placement. Yield growth through the downturn speaks to genuine franchise pricing power. We see scope for earnings to stabilise and return to growth from FY27, led by the completed A$25m cost-out, China IELTS optionality and a stabilising placement backdrop as policy settings evolve.

Morgans has a price target of $3.15 on IDP shares compared to $2.11 currently.

Comet Ridge Ltd (ASX: COI)

This company recently renegotiated a deal with Santos Ltd (ASX: STO) under which it would acquire the larger company’s interest in the Mahalo gas project.

The renegotiation required a smaller up-front cash payment, and also extended the completion date by three months.

The Morgans team said Comet Ridge had successfully used the uncertainty around Federal gas policy to its advantage.

They said the company was trading at a heavily discounted rate with regard to its gas holdings, and they have a price target of 27 cents on the shares compared to 12.5 cents currently, with a speculative buy rating.

The post Three ASX shares to buy right now according to Morgans appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.