Top brokers name 3 ASX shares to buy

Brokers have unsurprisingly been a little quieter this week after an extremely busy period during earnings season.

Despite this, a few recommendations have been made and three which caught my eye are listed below.

Here’s why brokers rate them as buys:

BlueScope Steel Limited (ASX: BSL)

According to a note out of UBS, its analysts have retained their buy rating on the steel producer and lifted the price target on its shares to $18.75. The broker continues to believe that the outlook for BlueScope’s U.S. business is positive despite the prospect of President Trump introducing tariffs on steel. It expects the company’s North Star business to benefit from the tariffs and believes higher prices will lead to widening spreads. Whereas it expects its SteelScape business, which wouldn’t benefit, to just pass on any price increases to its customers. Whilst I agree with UBS on this one, I think it might be worth holding fire until the full details of the tariffs are known and they have been put into place.

Oil Search Limited (ASX: OSH)

Analysts at the equities desk of Macquarie have retained their outperform rating on the energy company’s shares but slightly reduced their price target to $8.10 after earthquakes impacted its Papua New Guinea LNG project. The project is expected to be offline for around eight according to operator ExxonMobil, with the broker expecting earnings from the project to be negatively impacted by around 19%. Macquarie appears to believe that any sell off would be a buying opportunity and I would have to agree.

Orora Ltd (ASX: ORA)

A note out of Goldman Sachs reveals that its analysts have initiated coverage on this packaging company with a buy rating. The broker has placed a price target of $3.84 on Orora’s shares. According to the note, Goldman is bullish on the packaging company for a number of reasons including the growth of ecommerce and the potential for it to expand into other high margin areas of the market. The broker believes the company is capable of growing EBIT by a compound annual growth rate of 7.5% through to FY 2020. This is higher than the Bloomberg consensus estimate of 6.8%. I would agree with Goldman that Orora could be a good investment option.

Lastly, here are a few more shares that I think brokers would class as strong buys today. Each is at the top of their game and kicking goal after goal.

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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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