With earnings season gathering momentum brokers across the country have been busy adjusting recommendations as and when new data becomes available.
Three shares that have come out of this favourably are listed below. Here's why they have been tipped as buys:
Amcor Limited (ASX: AMC)
According to a note out of Deutsche Bank, its analysts have retained their buy rating and $17.00 price target on this packaging company's shares. The broker has held firm with its rating after Amcor announced plans to acquire US-based industry peer Bemis Corp for $9 billion. Its analysts aren't concerned about the multiple that Amcor is paying and see meaningful synergies being achieved once it is fully integrated. While I'm not a huge fan of Amcor, I do think the Bemis deal could prove to be a good move by management.
Ramsay Health Care Limited (ASX: RHC)
A note out of the Macquarie equities desk reveals that its analysts have held firm with their outperform rating but reduced the price target on the private hospital operator's shares to $71.00. The broker made the move after one of Ramsay's competitors in the UK, Spire, warned that its earnings were likely to be materially lower this year because of National Health Service spending cuts. Spire's shares fell by around 20% following the announcement. The broker, however, remains optimistic on the medium term for Ramsay due to brownfield developments and procurement savings. While I agree on the potential boost from brownfield developments, I don't think it will be enough to offset weakness across its entire business. I would still class Ramsay as a sell.
Transurban Group (ASX: TCL)
Another note out of Deutsche Bank reveals that it has retained its buy rating on this toll road giant's shares following the release of its full-year results. It has, however, cut the price target on its shares slightly to $13.00. The broker believes that Transurban still has a number of growth opportunities to take advantage of and appears unconcerned by the upcoming decision on the NSW government's sell down of its 51% stake in WestConnex. While I do like Transurban and think it could be a good investment, I do have a few concerns that its shares could come under pressure when bond yields widen enough.
