Brokers up and down Australia have been busy following earnings season adjusting their discounted cash flow models and valuations.
Three shares that have come out of this favourably are listed below. Here’s why brokers have given buy ratings to these shares:
CSL Limited (ASX: CSL)
According to a note out of Credit Suisse, its analysts have retained their outperform rating and increased the price target on the biotherapeutics company’s shares from $160 to $170. The broker appears to have been impressed with the performance of its Seqirus influenza business and believes it is positioned to compete for market share. The key driver of this will be its high margin quadrivalent and adjuvant products. I agree with Credit Suisse that CSL is a great investment option today and would class it as a buy.
IOOF Holdings Limited (ASX: IFL)
A note out of the equities desk of Macquarie reveals that its analysts have upgraded the financial services provider to an outperform rating from neutral. Furthermore, the broker has increased the price target on its shares to $12.10 from $11.50. Its analysts suspect that the company’s shares have underperformed the market since the sizeable acquisition of the OnePath business due to concerns over risks associated with an acquisition as large as this. However, Macquarie thinks the company’s track record means investors have a positive risk/reward on offer from an investment. While I’m not a huge fan of the company, I do think Macquarie makes a good point.
Regis Healthcare Ltd (ASX: REG)
Analysts at UBS have retained their buy rating and $5.00 price target on the aged care provider’s shares despite the Federal Court ruling against its asset replacement charges (ARC). UBS appears pleased with the way the company had handled the situation. While management continued to charge the ARC to residents, it made provisions in its financial accounts reducing its profit by an amount equal to the ARC revenue recognised. As such there will be no impact on its NPAT and EBITDA in FY 2018. While it isn’t my first pick in the industry, I do think it is a good option for investors due to Australia’s ageing population.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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