Top brokers name 3 ASX shares to buy today

Brokers up and down Australia have been as busy as ever adjusting their financial models and valuations accordingly as new data becomes available.

Three shares that have fared well from this and been given buy ratings are listed below. Here’s why brokers are bullish on them:

Adairs Ltd (ASX: ADH)

According to a note out of Morgans, it has upgraded this homewares retailer’s shares to an add rating from neutral and lifted the price target on its shares to $2.50. The broker believes that Adairs is well placed to bounce back strongly from its disastrous FY 2017. Furthermore, it appears confident that FY 2018’s strong form can be carried over to FY 2019 and has forecast same store sales growth of 4% next year. Based on Morgans’ forecasts, Adairs’ shares are changing hands at 11x FY 2018 earnings and 10x FY 2019 earnings. While it wouldn’t be my first pick in the industry, its undemanding valuation and generous dividend does make it a decent option.

Class Ltd (ASX: CL1)

Analysts at UBS have upgraded this SMSF accounting software provider’s shares to a buy rating with an improved price target of $2.95. The broker has noted that the company has launched a promotion for new customers that allows them to pay nothing for Class Super until 1 January 2019. While this is expected to increase its customer acquisition costs and profits in FY 2019, the broker appears optimistic that Class could benefit from a quicker-than-expected shift to cloud-based SMSF accounting software. I’m going to sit this one out until I have seen the full impact of this promotion.

Star Entertainment Group Ltd (ASX: SGR)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $6.25 price target on the casino and resort operator’s shares. According to the note, data has shown that pokie machine revenues returned to growth in the Gold Coast market in May. The broker has placed extra emphasis on the Gold Coast market due to Star Entertainment’s property expansion earlier this year. While I do like the look of Star Entertainment at these low levels, I’d prefer to wait for signs of improvement before investing.

Looking for more buy ideas? Then don't miss out on these hot stocks which I'm tipping to be market beaters in FY 2019.

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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 Class Limited. 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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