Earnings season may have come to an end but brokers across Australia are working as hard as ever and the notes continue to come in thick and fast.
Three shares that have been given buy ratings this week are listed below. Here’s why these leading brokers like them:
NEXTDC Ltd (ASX: NXT)
A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $9.20 price target on this data centre operator’s shares following the release of its full year results last week. Those results beat the broker’s expectations and further demonstrated the structural tailwinds the company is benefiting from. One slight concern, though, was the low level of contracted utilisation in its B2 and M2 sites. I would agree with Morgan Stanley on NEXTDC and think it could be a great long-term investment. Though, it does trade on a sky high valuation, meaning it is a high risk investment.
Redbubble Ltd (ASX: RBL)
According to a note out of Goldman Sachs, its analysts have retained their buy rating and lifted the price target on this ecommerce company’s shares to $1.95. The broker is very positive on Redbubble’s medium term prospects and has forecast a 26% CAGR in revenue between FY 2018 and FY 2021. This is expected to be driven by network effects, broadening of its product range, partnerships with rights holders to grow content, and improving penetration rates in new geographies. I would agree with Goldman on Redbubble and feel it is one of the better tech shares in the small cap space.
Regis Healthcare Ltd (ASX: REG)
Analysts at UBS have retained their buy rating but cut the price target on the shares of this aged care operator to $4.40 following its soft full year results last week. While its results were roughly in line with what UBS had been expecting, its guidance was weaker than forecast. However, UBS continues to believe that FY 2020 is when Regis will kick up a gear and start to benefit from recent developments. I’ve been underwhelmed with the performance of Australia’s aged care operators and would suggest investors wait for improvements before making a move.
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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of REDBUBBLE FPO. 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.