Brokers up and down Australia have been busy once again adjusting discounted cash flow models and valuations accordingly as new data becomes available.
Three top shares that have come out of this favourably are listed below. Here’s why brokers are tipping them as buys:
Aristocrat Leisure Limited (ASX: ALL)
According to a note out of Credit Suisse, it has retained its outperform rating and $35.00 price target on this gaming technology company’s shares. Although it is too early for the broker to assess completely, it likes what it has seen from the company’s Plarium business after the launch of several new games. Credit Suisse expects the launch of these games will boost its performance and lead to revenue growth accelerating 19% in FY 2019. I agree with Credit Suisse on this one and think it would be a great option for investors.
Rio Tinto Limited (ASX: RIO)
Analysts at Citi have retained their buy rating and $86.00 price target on this mining giant’s shares. The broker believes the potential Grasberg sale for US$3.5 billion would be a big positive and expects some of the funds to be find their way back to shareholders through dividends or buy backs. However, alternatively, the broker has suggested that the company could look at using the funds to grow its exposure to copper. While the recent trade war talk is a concern, I remain optimistic that it won’t spiral out of control and global growth will remain robust. This could make Rio Tinto a good option for investors.
Sims Metal Management Ltd (ASX: SGM)
A note out of Goldman Sachs reveals that it has retained its buy rating and lifted the price target on this metals company by 11% to $21.58. This price target represents potential upside of around 40%, firmly cementing its place on the broker’s conviction buy list. Goldman appears optimistic that internal initiatives launched in 2015 are coming to fruition at a time when the company is benefiting from several tailwinds. These include improving non-ferrous commodity prices, increasing grade discounts for its inputs, a regional premium for its U.S. output, and strong growth in U.S. scrap volumes. While it isn’t a company that I’m a big fan of, it is hard to argue against Goldman’s thesis.
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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.