It has been another busy week for brokers with countless notes hitting the wires. Three shares that are in favour and have been given buy ratings this week are listed below.
Here's why brokers think you should buy them:
Adelaide Brighton Ltd (ASX: ABC)
According to a note out of Credit Suisse, it has upgraded this integrated construction material and lime producing company's shares to an outperform rating but cut the price target on them to $5.30 after it downgraded its earnings guidance due to lower volumes. While this was disappointing, the broker expects volumes to grow in 2019 and thus sees a lot of value in its shares at this level. Credit Suisse believes that increasing demand for lime from Western Australia-based lithium producers will underpin its growth in the coming years. I think Credit Suisse makes a fair point and feel Adelaide Brighton could be worth a closer look after its sharp share price decline.
Kidman Resources Ltd (ASX: KDR)
Analysts at Ord Minnett have retained their buy rating and $2.80 price target on this lithium miner's shares after it executed a deed of settlement with the objectors to the applications for its exemption from the minimum expenditure obligations on its Mt Holland tenements. The broker is pleased to see this major hurdle cleared and is now looking forward to its definitive feasibility study and the final investment decision in the coming months. I like Kidman Resources and believe its Mt Holland operation has a lot of promise. But it certainly is a high risk investment and largely unsuitable for the average investor.
QBE Insurance Group Ltd (ASX: QBE)
A note out of Morgan Stanley reveals that its analysts have retained the overweight rating and $12.50 price target on this insurance giant's shares following yesterday's market update. According to the note, the broker felt the post-update selloff was overdone and appears pleased that business momentum remains strong. It also notes that management appears confident that it can sustain a return on equity above 10%. While it isn't necessarily a share that I'm a big fan of, I thought that yesterday's update was reasonably positive and can understand why Morgan Stanley would class it as a buy.
