With earnings season peaking this week, brokers have been as busy as ever with buy and sell recommendations.
Three shares that have been given the coveted buy rating are listed below. Here's why they are in favour:
Helloworld Travel Ltd (ASX: HLO)
A note out of Morgans reveals that its analysts have upgraded this travel company's shares to an add rating from hold and lifted the price target on them to $5.75 after the release of its full year results. Although Helloworld fell a touch short of the broker's expectations in FY 2018, it believes this is down to one-offs relating to acquisition costs. Morgans appears to be pleased with the company's guidance for the year ahead and the discount that its shares trade at in comparison to its peers. I agree with Morgans on this one and think Helloworld's shares are great value for its current growth profile.
Oil Search Limited (ASX: OSH)
Equity analysts at Macquarie have retained their outperform rating and $9.65 price target on this energy producer's shares following the release of its half year results. According to the note, those results came in ahead of the broker's forecasts due to its lower than expected depreciation and amortisation expense. In addition to this, the broker appears pleased with management's decision to increase its full-year production guidance after a strong performance in PNG following the recommencement of work post-earthquake. I think Oil Search would be a good option for investors looking to gain exposure to rising oil prices.
Super Retail Group Ltd (ASX: SUL)
According to a note out of Goldman Sachs, it has retained its buy rating and lifted the price target on Super Retail's shares to $10.85 from $9.45 after the release of a strong full year result yesterday. The broker appears pleased to see Super Retail break out of its earnings downgrade cycle and deliver a result modestly above its expectations. Goldman likes the company's simplified strategy and expects it to be completed by the end of FY 2019 when the final Rays Outdoors store are converted to the Macpac brand. This, combined with early evidence of execution and a stable macro backdrop for the Australian consumer, resulted in the buy rating being retained and the price target lifted. I agree with Goldman on this one and feel Super Retail is one of the best options in the retail sector right now.
