With earnings season rapidly approaching, brokers have been busy adjusting their forecasts and recommendations accordingly ahead of results releases.
Three shares that have fared well from this and have been given buy ratings are listed below. Here’s why they have been tipped as buys:
Challenger Ltd (ASX: CGF)
According to a note out of Citi, its analysts have retained their buy rating and $13.60 price target on the shares of this annuities company. The broker has held firm with its recommendation despite revising its earnings forecasts lower for FY 2018 to account for losses on widening spreads. Citi remains bullish on Challenger’s long-term growth potential and appears to see it as a good buy and hold option. While I do agree that it could have a bright future ahead of it, I’m holding off an investment until it provides guidance for FY 2019 which shows a return to growth.
IMF Bentham Ltd (ASX: IMF)
A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and lifted the price target on the law firm’s shares slightly to $3.85. According to the note, Goldman appears pleased with IMF Bentham’s shift in its broader strategy towards creating a diversified portfolio in its new fund structure. Furthermore, Goldman has noted how the company has a strong pipeline and continues to be presented with potentially attractive case investment opportunities. While I’m not a fan of the company, it could be worth a closer look given how much upside Goldman is predicting.
Mayne Pharma Group Ltd (ASX: MYX)
Analysts at Credit Suisse have upgraded this pharmaceutical company’s shares to an outperform rating from neutral with an increased price target of $1.00. The broker has made the move after assessing the market opportunity for two news products Mayne Pharma plans to release this year. Furthermore, the broker has suggested that investors view any earnings season share price weakness as a buying opportunity. The combination of these products and the easing of generic drug price deflation could make Mayne Pharma a good investment in my opinion. Though, it would be a reasonably high risk one.
Finally, here are four more buy-rated shares which I believe can provide market-beating returns 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 and has recommended Challenger 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.