Macquarie tips these 6 ASX stocks could outperform

I’ll take a closer look in this wire.

A quick summary of Macquarie’s outlook

Macquarie pointed to an improving earnings backdrop for its upcoming conference with presentations from 113 companies. The good news is that this should mean a conference featuring more upgrades rather than downgrades.

“The unseasonably strong earnings revisions are another positive sign for the near term earnings outlook,” Macquarie said in its outlook. It sees promise for further upgrades before August.

There are four key themes Macquarie anticipates to feature across the conference:

• The impacts of sticky inflation
• Outlook for demand given delayed rate cuts
• Potential impact from the 2025 Budget and geopolitical events
• Investments in AI

Hardly a surprise given how prominently these topics continue to impact on daily life.

Companies with potential positive surprises

Macquarie’s quantitative filter has identified six stocks which it has Outperform ratings on, are not overbought and have had positive consensus earnings revisions in the last three months.

The integrated insurance provider ranks as a STRONG BUY on Market Index’s Broker Consensus Tool. It offered stellar returns in February reporting season and many fund managers have used insurance companies as their preferred exposures to the Financials sector. Insurers have benefitted from rising interest rates (expected to stay higher for longer) and growth in gross written premiums.

The property investment company operates its portfolio across Australian office, logistics and retail assets. It is predominantly owned by institutional investors – this type of ownership is often viewed as a mark of quality given the stringent investment criteria that institutions use.

3. Reliance Worldwide (ASX: RWC)

Reliance is involved in the design, manufacture and supply of water flow, control and monitoring products and solutions for the plumbing and heating industry. It had stellar results in the February reporting season and reaffirmed its trading outlook this week – tipping a slight decline in consolidated group revenues.

It was recently referenced in an episode of Buy Hold Sell as a Sell given it has hit expectations for Auscap Asset Management’s Will Mumford. It ranks as a STRONG BUY in Market Index’s Broker Consensus Tool.

4. GWA Group (ASX: GWA)

The supplier of building fixtures and fittings to households and commercial premises ranks as a BUY in Market Index’s Broker Consensus Tool. It has previously been hit by inflation concerns as customers put renovations on hold meaning revenues were flat in 2023. Demand for new builds along with renovations in commercial properties, like aged care, is expected to increase and support revenues across the year.

MMS offers salary packaging, novated leasing and fleet & asset management and related financial products and services. It ranks as a STRONG BUY on Market Index’s Broker Consensus Tool.

6. IMDEX (ASX: IMD)

Companies with potential negative surprises

Macquarie also filtered out several companies it has seen negative revisions in with the potential for more. These include:

Macquarie noted that Corporate Travel Management (ASX: CTD) and Nine Entertainment Co Holdings (ASX: NEC) have been oversold so any negative surprises may have already been accounted for.