Although earnings season is done and dusted, brokers up and down Australia are as busy as ever making changes to their financial models and reviewing recommendations.
Three shares which have come out favourably are listed below. Here’s why brokers think they are in the buy zone:
Beach Energy Ltd (ASX: BPT)
According to a note out of Credit Suisse, its analysts have retained their buy rating and 80 cents price target on this energy company’s shares. The broker appears to have been pleased with Beach Energy’s full-year results and transformation into a highly profitable business. In FY 2017 the company posted underlying net profit after tax of $162 million, up an impressive 353% on the previous year. While I agree that Beach Energy is a lot more attractive than it was 12 months ago, it wouldn’t be my first pick in the industry.
Idp Education Ltd (ASX: IEL)
Analysts at Goldman Sachs initiated coverage on Australia’s largest student agent company and an owner in the IELTS test with a buy rating and $6.35 price target. According to the note, the investment bank believes that its strong brands and partnerships with universities gives it a competitive advantage. This, combined with global international student growth and expansion opportunities, leads Goldman to believe that the company is capable of growing its earnings by 17% per annum through to FY 2020. IDP certainly will need to deliver on these lofty expectations given that its shares are changing hands at 34x trailing earnings.
Wesfarmers Ltd (ASX: WES)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and increased the price target on the conglomerates’ shares to $44. This price target increase has been made on the expectation that Wesfarmers’ resources business will benefit from higher coal prices in FY 2018. While I think Wesfarmers is looking a lot stronger than it did 12 to 24 months ago, I would class it as a hold at the current share price and wait for opportunities to buy in at around the $35 to $37 mark.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. 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.