Brokers have been as busy as ever this week recommending shares to buy and sell.
Three shares that have been rated as buys that caught my eye are listed below. Here's why they like them:
NEXTDC Ltd (ASX: NXT)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $9.20 price target on this data centre operator's shares. While the market appears to have been disappointed that no major new deals were announced with its FY 2018 results, the broker believe there is a chance that one could be announced in the near term that gives its future sales and earnings a big lift. In addition to this, adjustments to its utilisation estimates for NEXTDC's S2 site have led to higher billing forecasts in FY 2020. I agree with Morgan Stanley on NEXTDC and believe it would be a great buy and hold investment.
Transurban Group (ASX: TCL)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating but reduced the price target on this toll road giant's shares slightly to $11.87. On Thursday Transurban reached the financial close on the acquisition of a 51% equity stake in WestConnex from the NSW Government. While its shares have come under a spot of pressure from the dilution caused by the rights issue, the broker believes investor sentiment will improve in time as traffic and pricing data becomes available. Although I am a big fan of Transurban, I'm staying clear of bond proxies right now due to the U.S. Fed raising interest rates at a fair pace.
Westpac Banking Corp (ASX: WBC)
Analysts at Goldman Sachs have retained their buy rating but cut the price target on this banking giant's shares slightly to $35.06 after it advised that its full year profits would be impacted by $235 million of provisions. While the broker acknowledges that the announcement of further customer redress and provisioning costs is disappointing, especially given last year's $169 million in pre-tax redress, it believes it is relatively immaterial to cash earnings and represents only a 5 basis point hit to its CET1 ratio. I agree with Goldman on Westpac and continue to believe its shares are good value. Though, investors may want to wait for the interim Royal Commission report to be released before snapping up shares.
