Two ASX Shares Identified as Valuable Options for November

November 04, 2024 02:54 PM AEDT | By Team Kalkine Media

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Highlights

Telstra Group Ltd and Premier Investments Ltd are receiving positive ratings from brokers for potential value opportunities.

Telstra's stable growth outlook and strong yield, while Premier Investments is expected to benefit from a recent divestment.

Both companies demonstrate attractive forward price-to-earnings ratios, appealing to those seeking quality opportunities in the ASX market.

In the current landscape of the ASX, Telstra Group Ltd (ASX:TLS) and Premier Investments Ltd (ASX:PMV) have emerged as notable candidates for those seeking value opportunities this November. Recent evaluations by analysts indicate that both companies are trading at favorable valuations, drawing attention from the market.

Telstra stands out particularly for those looking for reliable income streams. According to CommSec data, Telstra is rated a buy based on consensus analysis. The median analyst projection suggests a forthcoming earnings figure of 20 cents per share for FY25. This places Telstra on a forward price-to-earnings (P/E) ratio of 19, which is below the average for many communication service companies. Analysts from Goldman Sachs affirm the value in Telstra’s current share price, emphasizing the company's stable growth outlook and robust dividend potential. After adjusting for NBN payments and dividend forecasts, the valuation appears more attractive. Expected fully franked dividends of 19 cents per share for FY25 and an increase to 20 cents the following year translate to forward yields of 4.88% and 5.14%, respectively.

On the other hand, Premier Investments, the parent company of popular brands such as Peter Alexander and Smiggle, is seen as a compelling opportunity following its recent divestment of the Apparel Brands division to Myer Holdings Ltd. Analysts from Bell Potter anticipate significant growth potential as a result of this strategic move, which is valued at approximately $601 million. The brokerage maintains a buy rating, suggesting a price estimate of $38 per share. Meanwhile, Morgan Stanley also rates Premier as a favorable option, with a valuation of $39.50 post-divestment.

Both Telstra and Premier Investments exhibit appealing fundamentals, positioning them as worthy considerations for those exploring value shares in the ASX market this month.

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