Leading brokers name 3 ASX shares to buy

The Qantas Airways Limited (ASX:QAN) share price could climb significantly from here according to one broker. Here’s why…

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Credit: Joits

Once again brokers from across Australia have been busy running the rule over a number of Australia’s leading shares.

Three shares which came out favourably are listed below. Here’s why leading brokers think they are in the buy zone:

Qantas Airways Limited (ASX: QAN)

According to a research note out of Citi this morning, its analysts have reiterated their buy rating and increased their price target on the airline’s shares from $4.71 to $7.09. Citi believes that a long overdue rerating of Qantas’ shares is finally happening. Despite the Qantas share price rallying strongly this year, I would agree with Citi that there is still significant upside potential left. As long as oil prices remain favourable I would class Qantas as a buy.

Santos Ltd (ASX: STO)

A research note out of Credit Suisse reveals that its analysts have upgraded the oil and gas producer to an outperform rating with a $3.80 price target. The broker appears to believe that the impact of the domestic gas security mechanism has been priced into its shares now. This could mean there is upside potential if oil prices rise from here. As I’m not bullish on oil prices I would suggest investors stay clear of Santos. But if you think oil prices will rise then it could be a good resources option.

Tabcorp Holdings Limited (ASX: TAH)

Deutsche Bank has upgraded the gambling and entertainment company’s shares to a buy rating with a $4.80 price target. According to the research note Deutsche believes its shares are trading at a discount even before factoring in the potential benefits of its planned merger with Tatts Group Limited (ASX: TTS). Whilst Tabcorp itself isn’t a company that appeals to me, I do think that if the merger with Tatts is successful, the combined entity could be worth another look. The Australian Competition Tribunal is expected to decide on the merger by September.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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