Earnings season may be drawing to a close today but that hasn’t stopped a large number of broker notes from hitting the wires.
Three buy ratings that caught my eye are summarised below:
Bega Cheese Ltd (ASX: BGA)
According to a note out of UBS, it has retained its buy rating and lifted the price target on this food company’s shares to $8.80 following the release of its full year results on Wednesday. Bega reported revenue growth of 17% to $1,440 million thanks largely to a 29% lift in export sales to $430 million, which was in line with expectations. The broker appears positive on the Koroit acquisition and believes that its earnings risk is to the upside. While I do like the company, management’s vague guidance for the year ahead means I’m not a buyer of its shares at this point.
Galaxy Resources Limited (ASX: GXY)
A note out of Citi reveals that its analysts have retained their buy rating and $4.30 price target on this lithium miner’s shares after yesterday’s half year results release. The broker was pleased with Galaxy’s EBITDA and has noted that the sale of tenements at its Sal de Vida operation to POSCO for US$280 million leaves the company with excess cash. Citi suspects that shareholders could be rewarded. While I agree that Galaxy is a buy, I would only recommend it to investors with a high tolerance for risk.
TPG Telecom Ltd (ASX: TPM)
Analysts at Morgans have upgraded this telco company’s shares to an add rating with a $10.40 price target after it announced that it has come to an agreement with Vodafone Australia in respect to their proposed merger. Although Morgans appears disappointed with the lack of colour given in regards to cost and capex savings, it has a lot of faith in TPG Telecom’s David Teoh and appears willing to back him on this one. While I agree that the merger makes TPG Telecom a buy, I would suggest investors hold out for a better entry point after its stellar run.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended TPG Telecom 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.