5 of the top ASX stocks for July 2023

The Australian economy entered the new financial year under straitened circumstances after the Reserve Bank of Australia (RBA) rattled markets with a 0.25% hike to its official cash rate in June.

The move brought the target rate to 4.1%, for its highest level in over a decade. Gains in the cost of borrowing will continue to put pressure across the economy, with many mortgage borrowers likely to be hard hit as their fixed rate terms come to an end.

The RBA decided to put a pause on rate hikes in July, however, giving some hope of relief to the broader economy. Inflation has also started to ease, potentially paving the way for a further relent in rate hikes. The monthly headline inflation figure for the 12 months to May came in at 5.6%, a sizeable decline compared to the print of 6.8% for April.

While inflation is still some way away from the RBA's target of 2 - 3%, many leading economists expect inflation to continue to fall throughout 2023 into the next year.

It may still be an opportune period for investment in Australian equities, given that the RBA's eventual suspension of rate hikes could provide share prices with a boost in the not-too-distant future.

Here is a list of five of the top ASX-listed stocks for investors to consider as of July 2023.

1. ANZ Group Holdings (ASX: ANZ)

2. Corporate Travel Management Ltd (ASX: CTD)

3. John Lyng Group (ASX: JLG)

4. Xero Limited (ASX: XRO)

5. Lovisa Holdings (ASX: LOV)

1. ANZ Group Holdings (ASX: ANZ)

Melbourne-headquartered ANZ has its origins in two of Australia's most venerable financial institutions - the Bank of Australasia and Union Bank of Australia, established in 1835 and 1837 respectively, well over a century prior to their merger into ANZ in 1951. As of 2023, ANZ is Australia's second-largest bank in terms of total assets.

Goldman Sachs analysts recently upgraded ANZ to a conviction buy rating with a target price of $27.38. According to the broker, ANZ is the best pick out of Australia's big four banks at present due to the sustainability of improvements to institutional returns.

Analysts from Morgans also view ANZ favourably, recently retaining a hold rating for the bank with a price target of $26.24.

The bank's share price currently sits at $23.87, for a year-to-date rise of 3.74%.

2. Corporate Travel Management Ltd (ASX: LTD)

CTD recently obtained a Travel Management Services contract for the Australian government with an initial 4-year term, prompting analysts from UBS to give the company a buy rating with a price target of $25.95.

In a note, UBS analysts said that they are confident that CTD will achieve guidance for FY23.

CTD's share price currency sits at close to $18, for a more than 21% year-to-date rise.

3. John Lyng Group (ASX: JLG)

Construction company John Lyng provides building and restoration services across both Australia and the US, with a focus on the restoration of properties in the aftermath of insured events such as natural disasters.

JLF could see its share price rise from the unfortunate increase in weather-related disasters as a result of climate change factors – especially in the coastal and tropical regions of both Australia and the US.

Its earnings have posted robust growth, prompting JLF to raise its revenue and EBITDA guidance for FY23. JLF now expects total normalised EBITDA for FY23 to rise by 56% in year-on-year terms.

Despite its promise and strong earnings prospect, JLF's share price is currently down over 8% year-to-date.

4. Xero Limited (ASX: XRO)

New Zealand-headquartered Xero is a software company that provides online accounting solutions to over 3.5 million small business subscribers.

The company's online platform gives small businesses to perform a full range of accounting tasks online, including sending invoices, performing bank reconciliation, paying bills, claiming expenses, tracking projects and doing payroll.

Earlier this year Morgans gave Xero an add rating with a target price of $97, stating that rising rates are giving investors 'a rare opportunity to buy a high quality global growth company at a discount to the life time value of its current customer base.

Xero's share price could also receive a boost from the recent decision of CEO Sukhinder Singh Cassidy to slash 800 jobs and raise subscription prices.

5. Lovisa Holdings (ASX: LOV)

Fast fashion jewellery company Lovisa has embarked upon an ambitious expansion plan into overseas markets, bringing its total store count to 715 globally. Its presence in the US is rapidly growing, with 155 stores in the country, as compared to 163 in its home market of Australia.

Lovisa could be well positioned to weather inflationary pressure due to the low cost of the goods it sells, as well as its target demographic of fashion-conscious youths whose discretionary spending is less affected by rising interest rates.

Its overseas expansion also effectively diversifies its global market exposure, helping it to deal with any regional economic risk.

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