2 ASX All Ordinaries shares top brokers rate as buys

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Investors looking for buying opportunities during these volatile times have two ASX shares on the All Ordinaries Index (ASX: XAO) to consider.

These ASX companies are the latest buy-rated shares from leading brokers and both shares are outperforming today.

The All Ordinaries share to buy for its market-beating potential

The first is the Endeavour Group Ltd (ASX: EDV). Shares in the hospitality group have been in the green all day and are trading 2% higher at $7.74 at the time of writing. In comparison, the All Ords has gained 0.28%.

According to JPMorgan, there’s still more room for the Endeavour share price to run. The broker initiated coverage on the shares with an ‘overweight’ recommendation and an $8.60 per share price target.

The optimism stems from the broker’s belief that the market is underestimating the group’s earnings potential over the next few years. Said JPMorgan:

Our EPS [earnings per share] forecasts are 5% and 6% ahead of Bloomberg consensus in FY23 and FY24, respectively, due to the reinvestment in the hotel network and continued strength in the retail drinks business.

This price target implies a 24.6x FY24 PER, underpinned by the market-leading position of the retail and hotels business, both of which have a deep moat and earnings growth optionality, which justifies a premium to the market, in our view.

Worth adding to your shopping list

Meanwhile, the Universal Store Holdings Ltd (ASX: UNI) share price is also outperforming today. Shares in the fashion retailer rallied 3.5% to $4.66 at the time of writing.

The rally coincides with Citigroup’s decision to start coverage on Universal shares with a ‘buy’ recommendation.

The broker’s optimism is based on the view that the Universal Store share price has several medium-term growth drivers.

These include new store rollouts and margin expansion opportunities. These drivers could see the retailer generate a 10% CAGR for its earnings per share from FY21 to FY24.

Citigroup said:

Universal’s store rollout target of 100+ across ANZ appears to be conservative given our analysis indicates potential for the company to roll out 110 stores.

We forecast Universal’s EBITDA margin to expand ~100 bps over FY21 to FY25e, driven by new stores reaching maturity, increasing private brand penetration, higher levels of direct sourcing and scale benefits.

The broker’s 12-month price target on the Universal Store share price is $5.83 a share. The retailer is also forecast to pay a 27.1 cents a share dividend in FY23.

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