With annual general meeting season gathering pace, brokers across the country have been busy updating their discounted cash flow models and recommendations accordingly to account for new data.
Three shares that have fared well and been given buy ratings are listed below. Here's why brokers like them:
Adairs Ltd (ASX: ADH)
According to a note out of Morgans, its analysts have retained their add rating but cut the price target on this home furnishings retailer's shares slightly to $2.52 following the release of a trading update last week. The broker was pleased with its update and the reiteration of its FY 2019 guidance. Morgans believes that the company's products and ranges are resonating well with consumers and allowing it to win market share. In addition to this, the broker points out that Adairs' shares are trading at a significant discount to the rest of the sector. I agree with Morgans and think it is one of the best options in the sector right now.
Carsales.Com Ltd (ASX: CAR)
A note out of the Macquarie equities desk reveals that its analysts have upgraded this car listing company's shares to an outperform rating with a $13.90 price target. Although Carsales reported a slowdown for its Display advertising and Stratton finance businesses, the broker notes that management expects an improved performance in the second half. In addition to this, Macquarie appears to believe that premium listings could be a key driver of earnings growth moving forward. While I do like Carsales, I'd class it as a hold right now until these improvements are seen.
Nanosonics Ltd (ASX: NAN)
Another note out of Morgans reveals that its analysts have upgraded this infection control specialists' shares to an add rating with a $3.32 price target. The broker has made the move largely on valuation grounds after the Nanosonics' share price pulled back by almost 25% from its 52-week high of $3.86. Also supporting the buy thesis is the potential launch of new products over the next 18 months which the broker believes could drive significant profit growth. While it is a high risk investment due to the premium its shares trade at, I would agree with Morgans that Nanosonics is a buy.
