Buy, hold, sell: Accent, Karoon Energy, and Transurban shares

The team at Morgans has been busy running the rule over a number of popular ASX shares this week.

Let’s see if the broker is bullish, bearish, or something in between on these names. Here’s what it is saying:

Accent Group Ltd (ASX: AX1)

Morgans remains positive on this struggling footwear retailer and notes that it received an opportunistic takeover offer this week.

In response, the broker has retained its buy rating on Accent shares with an improved price target of 85 cents. This compares to its current share price of 76 cents. It commented:

Frasers Group has made an unconditional on-market cash takeover offer for AX1 at $0.65 per share, which represents no premium to the closing share price. We see this offer as opportunistic, given the weakness in the share price over the last 12 months (down 64%), and see scope for Frasers to revise its bid higher. We have made no changes to our forecasts, but have increased our target price to $0.85 (from $0.75) applying a lower discretionary discount. We retain our BUY recommendation.

Karoon Energy Ltd (ASX: KAR)

This energy producer’s shares have been hammered this week following a disappointing update.

While the update was disappointing, Morgans has upgraded Karoon Energy’s shares to a hold rating with a $1.67 price target following the share price decline. This compares favourably to its current share price of $1.44. The broker said:

A good company in a difficult position, dealing with multiple operational issues, albeit enjoying a nice bump in earnings resulting from the Middle East conflict. Operator LLOG advised of ongoing operational issues leading to a 41% downgrade to Who Dat production in 2026, an 11% downgrade at group level. Down 20% in two sessions, KAR is trading close to our revised target price. As a result, we lift our Trim rating to HOLD with a A$1.67 target price.

Transurban Group (ASX: TCL)

Morgans was disappointed with this toll road operator’s recent traffic update, highlighting that traffic is below expectations.

It believes this leaves it positioned to fall short of consensus estimates. As a result, it has downgraded Transurban’s shares to a sell rating with a $12.50 price target. This is 15% lower than its current share price of $14.74. It commented:

TCL’s update indicated traffic is running below expectations. TCL also announced its exit from the Montreal market via divestment, crystallising an equity value loss. DCF-based 12-month target price reset to A$12.50/sh (-5% vs previously), with forecast downgrades (we are more bearish on EBITDA, Free Cash and DPS growth than consensus) partly offset by discount rate adjustments.

TCL’s recent share price strength (+9% since its February result and not far off all-time highs) is not reflective of the weaker traffic growth and higher interest rate environment that typically challenges TCL’s valuation. We recommend clients use the share price strength to take profits in overweight positions. Downgrade from HOLD to SELL.

The post Buy, hold, sell: Accent, Karoon Energy, and Transurban shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Accent Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group. 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 Scott Phillips.