It has been yet another busy week of corporate news and developments which has led to a large number of broker notes doing the rounds.
Three buy ratings that caught my eye are summarised below. Here's why brokers are bullish on these shares:
Asaleo Care Ltd (ASX: AHY)
According to a note out of Citi, it has upgraded this personal care company's shares to a buy rating with an increased price target of $1.05 following its decision to sell its struggling Australian Consumer Tissue business. The broker believes that getting rid of the loss-making business is a smart move and appears pleased that it will be left with businesses that have greater market shares, stronger brands, and better returns on capital. While I agree that this move was a great one by management, I think its shares are about fair value after yesterday's massive gain.
Telstra Corporation Ltd (ASX: TLS)
A note out of Morgans reveals that its analysts have held firm with their add rating and $3.50 price target on this telco giant's shares after its 5G update event. According to the note, one key takeaway from the event was that 5G could reset pricing as the different telcos will sell different 5G services. Outside the event, Morgans picked out a couple of potential catalysts which it believes could lead to its shares re-rating. One is splitting Telstra into Retail and InfraCo and the other is pricing pressures easing. The broker appears optimistic that the TPG and Vodafone merger could help with the latter. While I do like Telstra, I'm holding out until it has confirmed its dividend plans for FY 2019.
WiseTech Global Ltd (ASX: WTC)
Analysts at Morgan Stanley have retained their overweight rating and increased the price target on this logistics platform company's shares to $20.00. According to the note, the broker has made the move after factoring the company's recent acquisitions into its forecasts. Its analysts expect the acquisitions to boost revenue but reduce its earnings slightly due to putting pressure on margins. Despite this, it still expects its earnings to more than double over the next two years. While its shares are reasonably risky due to their sky high valuation, I do think they could be a great long-term investment.
