The last few days have seen a great number of popular companies reporting their respective results.
Unsurprisingly, this has led to a good number of broker upgrades and downgrades this week.
Two shares that have found favour with brokers and been given buy ratings are listed below. Here's why brokers are recommending them:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Credit Suisse, its analysts have upgraded the dairy company to an outperform rating with a NZ$12.75 ($11.95) price target following the release of its half-year results. The broker was impressed with a2 Milk's growth during the year, which came in ahead of its expectations. Credit Suisse wasn't the only broker that was pleased with a2 Milk's result. As I mentioned earlier, Citi retained its buy rating but increased its price target to a massive $14.00. Whilst it might be best to wait for things to cool off and profit-taking to be over with, I do believe a2 Milk is a great long-term investment option with the potential to provide outsized returns for shareholders.
ARB Corporation Limited (ASX: ARB)
A note out of the Macquarie equities desk reveals that its analysts have upgraded the car parts company to an outperform rating with an increased price target of $21.00. Yesterday ARB reported a 10.9% increase in half-year pre-tax profit to $35.7 million as sales accelerated 12.4% to $208 million. This appears to have gone down well with the broker. Furthermore, the broker believes that export markets are now strengthening, which should improve its growth outlook. Whilst I agree with Macquarie and think ARB is a quality company, I wouldn't be a buyer at the current share price. But if its shares were to come down by around 10% to 15% from here, then I would be interested.
