While it has been a little quiet on the broker front this week, there have been a few broker moves coming through.
Two which caught my eye this week are summarised below. Here's why brokers think these shares are in the buy zone:
Adairs Ltd (ASX: ADH)
According to a note out of Goldman Sachs, its analysts have retained their buy rating and $2.25 price target following the retailer's recent trading update. Goldman appears to have been impressed with its strong like-for-like sales growth and its full-year guidance increase.
Like for like sales came in 14.8% higher during the first-half, leading to a lift in full-year EBIT expectations to between $40 million and $44 million from $34.5 million to $39 million. Although I have been very impressed with Adairs' turnaround, I feel that its shares have rallied to the point that they are about fair value now. Investors may find better value elsewhere in the market with shares such as Accent Group Ltd (ASX: AX1) or Noni B Limited (ASX: NBL).
BWX Ltd (ASX: BWX)
Another note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and $9.10 price target on BWX. The broker remains confident that the company behind the Sukin skincare range has a bright future ahead of it in the UK, Canada, and US markets. While these are very competitive markets, its analysts believe that BWX has a competitive advantage over its peers due partly to its lower pricing.
I think that BWX is one of the best buy and hold investment options available on the market today. Its shares may be expensive but I feel confident that it has the ability to grow its earnings at a rate that more than justifies the premium.
