It has been 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:
Costa Group Holdings Ltd (ASX: CGC)
According to a note out of Goldman Sachs, its analysts have upgraded this horticulture company's shares to a buy rating from neutral with a reduced price target of $5.90 following yesterday's profit warning. Goldman believes that yesterday's selloff was overdone and has created a buying opportunity for investors. Especially as it believes the company is still positioned to increase earnings per share by a compound annual growth rate of 13% from FY 2018 through to FY 2021. While I do agree that Costa looks attractive after this selloff, I intend to wait to see if its performance improves before picking up shares.
Monash IVF Group Ltd (ASX: MVF)
A note out of Morgans reveals that it has upgraded this fertility treatment company's shares to an add rating with a lowered price target of $1.13. According to the note, the broker believes the market has been too negative on Monash IVF, especially considering management reiterated its guidance at its annual general meeting in November. Based on Morgans' forecast for earnings per share of 9 cents in FY 2019, Monash IVF's shares are currently priced at approximately 11x earnings. While it isn't a share that I'm in a rush to buy, I would agree that it does look reasonable value at this level.
Treasury Wine Estates Ltd (ASX: TWE)
Analysts at Macquarie have retained their outperform rating and $18.22 price target on this wine company's shares following the release of a trading update after the market close on Thursday. According to the note, the broker is not concerned by a weak update from rival Constellation Brands and believes that its issues are partly company-specific. In addition to this, it was pleased to see management reiterate EBITS growth guidance of 25% in FY 2019, which is a touch ahead of the broker's estimates. I agree with Macquarie on Treasury Wine Estates and think it could be a good option for investors after its sharp pullback in recent months.
