Brokers have named 3 ASX shares to buy today

Brokers have been as busy as ever this week with countless upgrades and downgrades being released.

Three shares given buy ratings which caught my eye are listed below. Here’s why brokers are bullish on these shares:

Bapcor Ltd (ASX: BAP)

According to a note out of Morgan Stanley, it has retained its overweight rating and $7.00 price target on the automotive aftermarket parts distributor’s shares. Bapcor recently reiterated its roll out target of 200 stores, but the broker believes there is an opportunity for the company to target as many as 230 stores. This is expected to provide Bapcor with a significant runway for growth in the medium term. As I mentioned yesterday, I like the company a lot and think it could be a great buy and hold investment option.

Fortescue Metals Group Limited (ASX: FMG)

A note out of UBS reveals that its analysts have retained their buy rating and $5.75 price target on the iron ore producer’s shares following its strategic investment in Atlas Iron Limited (ASX: AGO). While there are countless reasons why Fortescue may have made the move, UBS suspects that it could be a way for the company to buy into Atlas Iron’s North West Infrastructure joint venture. That joint venture is looking to build a new inner harbour development at Port Hedland. While I do agree that Fortescue could be in the buy zone now, I would prefer to get access to iron ore through a more diversified player.

Sims Metal Management Ltd (ASX: SGM)

Analysts at Goldman Sachs have reiterated their conviction buy rating and $19.44 price target on the shares of the world’s largest ferrous scrap processor. According to the note, the broker expects Sims Metal Management to benefit from the strong recovery in global electric arc steel furnaces production and increased scrap use by blast furnaces required to balance the global steel market. Especially given the contraction in Chinese steel production and exports over the past 18 months. This is supported by recent data out of the US Census Bureau which revealed that ferrous scrap exports grew 28% year-on-year in April. Whilst it isn’t an industry that I find overly attractive, I do think that Goldman Sachs could be onto something with Sims Metal Management. Its shares are changing hands at 14x estimated FY 2019 earnings.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. 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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