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Top brokers name 3 ASX shares to buy

With countless trading updates, results, and investor days occurring over the last week or two, brokers across Australia have been kept on their toes.

This has led to a large number of broker notes hitting the wires, with some more favourable than others.

Three shares that have found favour with brokers this week are listed below. Here’s why they have been given buy ratings:

Baby Bunting Group Ltd (ASX: BBN)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and increased the price target on the baby products retailer’s shares to $2.10. Although the broker has cut its earnings forecasts following Baby Bunting’s guidance downgrade, it sees the closure of its competitors as an opportunity for the company to win a significant share of the market. This could put it in a position to negotiate better rates from suppliers. I completely agree with Morgan Stanley on this one and think investors ought to follow the broker’s advice.

Incitec Pivot Ltd (ASX: IPL)

A note out of Deutsche Bank reveals that its analysts have retained their buy rating and $4.65 price target on Incitec Pivot’s shares despite yesterday’s disappointing results release. Although the results were below Deutsche’s expectations, it is looking beyond this due to the positive outlook that the company has. I’m not as bullish on Incitec Pivot as Deutsche Bank is and would prefer to wait for signs of improvement before investing.

Westpac Banking Corp (ASX: WBC)

Analysts at Goldman Sachs have retained their buy rating and lifted the price target on the bank’s shares to $36.60. According to the note, Westpac’s half-year cash earnings were 4% ahead of the broker’s forecasts. The broker is especially bullish on the bank due to its belief that its pre-provision operating profit growth trajectory is not being reflected in its valuation. Furthermore, the broker has pointed out that its shares are trading at a notable discount to their historic average and the level they have historically traded at versus peers. I agree with Goldman on this one and think Westpac would be a great addition if you don’t already have meaningful exposure to the banks already.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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