Many of Australia’s leading brokers are back in the office again after the Christmas break and have been busy adjusting their recommendations to account for new data and developments.
Three shares that have fared well and been given buy ratings are listed below. Here’s why they are in favour with brokers:
Pilbara Minerals Ltd (ASX: PLS)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $1.20 price target on this lithium miner’s shares after its update last week. The broker appears to be pleased that strong demand has led to the company investigating the need for further processing expansions. And although its equity raising is expected to dilute earnings per share, the broker remains positive on Pilbara Minerals due to positive long term demand. While I do like Pilbara Minerals, I intend to see how lithium prices fare in 2019 before considering an investment.
ResApp Health Ltd (ASX: RAP)
According to a note out of Morgans, its analysts have a (high risk) add rating and 24 cents price target on this digital health company’s shares. The broker made the move after ResApp announced that it has submitted its CE Mark technical file that is required to allow commercial sales to commence. In addition to this, the broker notes that there are two potential catalysts on the horizon that could move its shares. These are the outcomes of its adult respiratory study in Australia and the clinical adjudication for croup.
ResMed Inc (ASX: RMD)
Analysts at Morgan Stanley have retained their overweight rating and increased the price target on its U.S. shares to US$126 (approximately $17.70 for its ASX listed CDIs). According to the note, the broker has reviewed the healthcare sector ahead of earnings season and sees no reason why ResMed’s strong earnings growth trajectory will be disrupted. In light of this, the broker believes that its rich valuation will remain in place for some time to come. I agree with Morgan Stanley on ResMed and think it is one of the best buy and hold options on the local market right now.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. 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.