5 ASX stocks to watch in 2023

With a new year upon us, it is time to look ahead to see which stocks could play a role in your investment journey for 2023. So whether you are interested in stocks dealing with the green revolution or renewable energy, prefer to stick to more established industries, or want to explore smaller-cap stocks with the hope of growing and diversifying your portfolio, now is the time to start planning.

In addition to conducting your own research, we have compiled five ASX stocks to watch. The stocks are:

Here is a closer look at these five ASX stocks to watch in 2023, including their recent performance, key considerations and other factors that may influence strong growth rates in the year ahead.

Coles Group (COL.ASX)

  • Coles Group is one of the largest food and retail chains in Australia, overseeing more than 120,000 employees.
  • Coles Group encompasses Coles Supermarkets, several liquor chains, Coles Express, Coles Local and the Flybuys loyalty program.
  • As of 6 December 2022, it had a market cap of $22.619 billion.
  • Sales rose 2.09% year-on-year for the financial year 2021–22 despite issues such as COVID-19 lockdowns and eastern flooding events.
  • For FY21–22, Coles Group’s net income increased by 4.28% to $1.05 billion, while net assets increased by 11.06% to $3.12 billion.
  • After eclipsing $19.33 per share in mid-August, the price has dropped below $17, which may make for a more palatable entry for some investors.

Wesfarmers (WES.ASX)

  • Wesfarmers is a conglomerate with a diverse portfolio of holdings across the retail, mining, industrial and chemical industries.
  • As one of the largest listed companies in Australia, Wesfarmers trades under household-name brands such as Kmart, Target and Bunnings, with more than 220,000 employees.
  • For those interested in top ASX stocks to watch with an ESG focus, Wesfarmers is committed to being an eco-conscious company. They are guided by the UN’s Sustainable Development Goals, of which they have identified nine to contribute.
  • Due to the challenges of rising inflation, the stock is down 25% from the start of 2022. However, with experts predicting inflation should normalise in 2023, it gives Wesfarmers growth potential over the long term.
  • As of early January 2022, Wesfarmers’ stock price was touching $60 a share, whereas, in early December 2022, it dropped below $48. This could provide a cost-effective entry point for investors.

Commonwealth Bank of Australia (CBA.ASX)

  • The Commonwealth Bank of Australia (CBA) is one of the country’s ‘Big Four’ banks.
  • The company has almost 16 million customers as of 2022, with nearly 49,000 employees and 800,000 shareholders.
  • As of 6 December 2022, CBA’s market capitalisation was over $180 billion, with significant capabilities to scale further.
  • With interest rates rising and potential net interest income, the company is expected to benefit during 2023 and beyond – which could translate to an increased share price.
  • For investors seeking ASX shares to watch with regular dividends, CBA has an annual dividend yield of around 3.67%, announced in its half and full-year results.

Domino’s Pizza Enterprises (DMP.ASX)

  • Specialising in pizza, Domino’s is one of the most recognisable names in fast food, with Domino’s Pizza Enterprises headquartered in Brisbane.
  • As of 2021, Domino’s Pizza Enterprises operated nearly 3,000 stores in Australia, New Zealand, Europe and Asia.
  • Sustainability and eco-friendly initiatives are a core component of Domino’s Pizza Enterprises’ ambitions, with a goal to have all of its stores’ electricity needs carbon-neutral by 2030.
  • The share price enjoyed a significant increase from early November through early December 2022 before plateauing, marking it as a potential growth stock in 2023.
  • The stock is currently lower when compared to its price at the start of 2022 – more than 46% lower, which could provide an entry point for new shareholders.

IDP Education (IEL.ASX)

  • IDP Education is a company offering various education and training services, including English language teaching.
  • Much of IDP Education’s success stems from its support of international students studying in English-speaking countries. The company operates in more than 30 countries.
  • Like many businesses relying on international students and global travel, IDP Education’s share price suffered due to border closures. As of November 2022, the share price was down 18% for the year.
  • But with borders reopening and international students able to travel again, the company has surged – for FY 2021–22, total revenue increased by 50% and net profit after tax grew by 161%.
  • The business has embraced the digital revolution by expanding its global network and introducing online English-language testing, which has positively impacted its profits.

As always, never rely on one piece of information to inform your overall strategy when investigating new ASX stocks to watch and invest in. Make sure you factor in your risk tolerance and long-term growth outlook before making any new investment decisions.

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This communication is for information and education purposes only and should not be taken as investment advice, a personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments. This material has been prepared without taking any particular recipient’s investment objectives or financial situation into account, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.