With AGM season in full swing and countless trading updates being released, brokers have been kept busy again this week. This has led to a large number of broker notes hitting the wires.
Three buy ratings that caught my eye are listed below, here's why brokers are bullish on them:
Commonwealth Bank of Australia (ASX: CBA)
According to a note out of Credit Suisse, it has upgraded this banking giant's shares to a buy rating with an improved price target of $78.00. The broker was pleased with Commonwealth Bank's robust quarterly update and has increased its earnings estimates on the back of it. Its analysts believe that that regulatory and compliance headwinds have been or are being dealt with, allowing the bank to focus its efforts on cost reduction. While it isn't necessarily my first choice in the sector, I do think it is a good option for investors.
CSL Limited (ASX: CSL)
Analysts at UBS have upgraded this biopharmaceutical company's shares to a buy rating from neutral but cut the price target on them to $222.00. According to the note, after reviewing the recent quarterly results of its competitors, the broker has lowered its earnings forecasts slightly. Despite this, the broker remains confident that CSL can deliver earnings growth of 11% per annum over the next three years and therefore sees value in its shares at current levels. I agree with UBS and think CSL would be a great investment option.
Freedom Foods Group Ltd (ASX: FNP)
A note out of Citi reveals that its analysts have retained their buy rating and $7.70 price target on this diversified food company's shares after it announced a strategic partnership with China's Theland. That partnership will see Theland distribute the company's Arnold's Farm range of cereals and snacks in the China market. According to the note, the broker believes this is a good strategy and expects it to become material in time. I agree with Citi on this one. I think it will take some time for the partnership to bear fruit, but it could be a major boost to its future earnings if it succeeds.
