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Top brokers name 3 ASX shares to buy next week

It has been another busy week for brokers with countless notes hitting the wires again.

Three buy recommendations that caught my eye are summarised below. Here’s why they are in favour with brokers:

Class Ltd (ASX: CL1)

According to a note out of UBS, its analysts have retained their buy rating but cut the price target on this SMSF platform provider’s shares slightly to $2.90 following the release of its first quarter update. Although the broker acknowledges that it was a soft quarter due to lodgement overhang, it was largely in line with its expectations. UBS has forecast for a decline in earnings this year due to the migration of AMP Limited (ASX: AMP) accounts, but it expects a return to growth in FY 2020. While I agree that FY 2020 is likely to be better, I think 29x estimated forward earnings means its shares are overvalued right now. I suspect a better entry point may present itself in the coming months.

Flight Centre Travel Group Ltd (ASX: FLT)

A note out of Ord Minnett reveals that its analysts have retained their buy rating and lifted the price target on this travel agent’s shares to $65.27. The broker believes that the selloff that has ensued since the company was accused of ripping customers off has been excessive. Based on the broker’s forecast for earnings per share of 321.5 cents in FY 2019 and its recent pullback, Flight Centre’s shares are changing hands at 16x estimated forward earnings at present. This could make it worth considering as an investment.

Transurban Group (ASX: TCL)

Analysts at Goldman Sachs have reinstated coverage on this toll road giant with a buy rating and $12.58 price target. According to the note, the broker believes the acquisition of a controlling 25.5% interest in the $25.2 billion WestConnex platform is a watershed moment for the company. Goldman feels it not only confirms its status as the country’s dominant toll road operator, but also provides some much-needed liquidity through its associated $4.8 billion oversized equity raising. In addition to this, the broker feels that adding WestConnex underpins its dividend outlook. I am a big fan of Transurban, but I’m staying away from so-called bond proxies for now due to widening of bond yields in the United States.

Lastly, here is a fourth share that has recently been given a buy rating. I think it is well worth considering after recent declines.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited and Transurban Group. The Motley Fool Australia owns shares of Class 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.

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