Brokers have been very busy adjusting their financial models and valuations this week following the conclusion of earnings season.
Three shares which found favour with brokers and were given buy ratings are listed below. Here's why they think they are in the buy zone:
Bingo Industries Ltd (ASX: BIN)
According to a note out of UBS, it has retained its buy rating and increased the price target on the waste management company's shares to $3.20. Bingo's strong first-half result came in ahead of the broker's estimates thanks to a positive operating environment and momentum from all of its businesses. Earlier this week Bingo reported a 37% increase in pro forma net profit after tax to $21.3 million. I agree with UBS on Bingo and think it could be a good long-term investment given its plan to expand its footprint nationally by 2022.
QBE Insurance Group Ltd (ASX: QBE)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating on the insurance giant's shares. The broker has, however, cut its price target from $11.10 to $10.70 after QBE fell short of its gross written premium estimates. Macquarie appears optimistic that rising bond yields and favourable international pricing should provide the company with tailwinds over the medium term. While I do agree that widening bond yields will be a positive for QBE, I wouldn't be in a rush to pick up shares. Over the last few years the insurer's performance has been hugely disappointing and largely unpredictable. I expect this to remain the case in the short to medium term at least.
Ramsay Health Care Limited (ASX: RHC)
Analysts at Citi have upgraded the private hospital operator's shares to a buy rating with an increased price target of $78.50 following the release of its half-year results yesterday. The broker appears confident that momentum in Ramsay's domestic operations will shift positively, offsetting any weakness in its international operations. It also points out that Ramsay's shares have not been this cheap in a long time. Whilst I do agree with Citi on most points, I was disappointed with Ramsay's first-half and would class it as hold right now until there's been a notable lift in its overall performance.
