BREAKING: Wilsons, a leading brokerage firm, has just announced a bullish outlook for two prominent ASX stocks, signaling a potentially profitable opportunity for investors amid a recovering retail sector. As consumer confidence rebounds, Wilsons identifies Collins Foods Ltd (ASX: CKF) and Universal Store Holdings Ltd (ASX: UNI) as key investment picks.
Wilsons’ analysis highlights the ongoing shift in consumer sentiment, particularly following recent interest rate cuts which have stimulated spending. The firm noted, “Despite a strong sector re-rating, there are still opportunities available that provide leverage to the consumer rebound.” This news comes as investors seek ways to capitalize on the evolving market dynamics.
Collins Foods Ltd (ASX: CKF) stands out as a top choice for Wilsons. The brokerage praised the brand strength of KFC, particularly in Australia, and emphasized the company’s robust cash flow and growth potential through its expanding store rollout in Europe. “CKF’s earnings are at an inflection point,” Wilsons stated, forecasting significant growth driven by increased domestic consumer spending. With a forward P/E ratio of approximately 19x and a projected three-year EPS CAGR of about 20%, CKF offers an attractive PEG ratio of 1.1x, suggesting strong value for investors.
In addition, Wilsons expressed confidence in Universal Store Holdings Ltd (ASX: UNI), citing its resilience in a challenging economic landscape. The youth-oriented retailer has successfully captured discretionary spending from its customer base, even amidst cost-of-living pressures. “Recent CBA data indicates that discretionary spending among this demographic has significantly improved due to rate cuts,” the firm noted, placing UNI in a favorable position for growth.
Despite a notable rise in share price over the past year, UNI remains competitively priced with a forward P/E of approximately 16x, representing over a 40% discount to the sector average. With a projected EPS growth rate of 28% from FY25 to FY28, UNI boasts a PEG ratio of just 0.6, making it one of the most attractive stocks in the sector according to Wilsons.
As the retail sector continues to evolve, investors are urged to consider these insights from Wilsons. The firm’s analysis reflects a broader trend of recovery in consumer spending, creating a ripe environment for investment in strategically positioned stocks like CKF and UNI.
Stay tuned for further updates on these developments and their impact on the ASX market. Investors are encouraged to act quickly, as opportunities in this landscape may not last long.
