Now that earnings season is firmly behind us, brokers and investment banks up and down Australia will no doubt be busy going through the reports of countless companies from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) with a fine tooth comb.
Two companies have recently caught the eye of brokers. One has been given a buy rating, the other unfortunately has found its shares on the wrong end of a sell rating. Here they are:
Crown Resorts Ltd (ASX: CWN)
This casino and resort operator has been given a buy rating and a $15.35 price target according to a research note out of Citi. Its analysts believe the company and the sector in general are poised for solid growth on the back of strong inbound tourism from China and South East Asia.
I agree with Citi on this and feel both Crown and rival Star Entertainment Group Ltd (ASX: SGR) would be great long-term investment options thanks to the sustained rise in inbound tourism. According to research by Tourism Australia, inbound tourism is expected to grow by an average of 4.1% per annum through to 2024-25, meaning a total of 10.6 million visitors annually in eight years' time.
CYBG PLC CDI 1:1 (ASX: CYB)
Another research note out of Citi reveals that its analysts have reiterated their sell rating on Clydesdale and Yorkshire Bank with a $4.26 price target. Its analysts appear to believe competitive pressures and low interest rates are going to weigh on net interest margins.
Although it looks reasonably cheap on paper and I have been impressed with the bank's new digital banking platform, I still believe Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) represent better options for investors in the sector. Especially considering the full ramifications of the Brexit may not be felt for some time to come.
