Top broker upgrades Costa Group Holdings Ltd shares to a buy rating

Credit: Didriks

The market may be sinking lower on Thursday, but the Costa Group Holdings Ltd (ASX: CGC) share price has managed to push ever so slightly higher.

At the time of writing the horticulture company’s shares are up 1% to $7.36, building on yesterday’s 6.5% gain.

Why are its shares climbing higher?

These gains are likely to be attributable to a broker note out of UBS.

According to the note, its analysts have upgraded Costa Group to a buy rating from neutral following the release of its solid half-year results.

Its analysts also lifted the price target on its shares to $7.50 from $6.80.

The broker appears to have been particularly impressed with the performance of Costa Group’s Produce segment. This segment performed above the broker’s expectations thanks to strong growth in citrus and tomatoes.

UBS isn’t the only broker that is bullish on Costa Group. A note out of the Macquarie Group Ltd (ASX: MQG) equities desk revealed that its analysts have retained their outperform rating and increased the price target on its shares to $7.60.

But with Costa Group’s shares now approaching this level investors may want to consider these top shares instead.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. 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 Scott Phillips.

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