Our ‘Best Calls to Action’ are designed to guide you through the current reporting season landscape by highlighting stocks with compelling buying prospects. It also provides insights into those that may not be viable for growth at this time. These selections are based on rigorous analysis of market trends, financial health, and growth potential, ensuring you have access to high-value investment opportunities.
Happy to buy today
Treasury Wine Estates (ASX:TWE) - Pivot to Luxury is paying off
TWE’s FY24 result held few surprises given the company’s recent trading updates. Pleasingly, its two Luxury portfolios and cashflow all slightly beat guidance. The much smaller and low margin Treasury Premium Brands (TPB) disappointed. Importantly, its targets for both of its Luxury wine businesses over the next few years were reiterated, and if delivered, will underpin double digit earnings growth out to FY27. While not without risk given macro headwinds, TWE’s trading multiples look attractive to us. and we maintain an Add recommendation.
We maintain our ADD rating.
Dexus Industria REIT (ASX:DXI) - Solid occupancy
The FY24 result was in line with upgraded guidance with rental growth helping to offset loss of income from asset sales. Occupancy strong at +99%. FY25 guidance comprises FFO of 17.8c (+2.3% on the pcp) and DPS of 16.4c which equates to an implied distribution yield of 5.8%. The balance sheet remains solid with look-through gearing around 27% ensuring there is capacity to complete the committed development pipeline which will enhance future rental growth. Asset sales are also likely to be considered.
We maintain our ADD rating.
Trim/Funding Source
Telstra Group (ASX:TLS) - Adjusting for growth
The FY24 underlying result came in towards the lower end of expectations. NPS (customer advocacy) and return on capital continue to improve while the heavily lifters remained Mobile (61% of EBITDA and +9% yoy) and InfraCo Fixed (21% of EBITDA and +6% yoy). Growth here more than offset declines elsewhere.
We recommend a REDUCE rating.
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