With trading updates coming out thick and fast and earnings season just a matter of weeks away, brokers across Australia have been busy adjusting their estimates and recommendations accordingly.
Three ASX shares that have fared well and been given buy ratings are listed below. Here’s why brokers are bullish on them:
Ansell Limited (ASX: ANN)
According to a note out of the Macquarie Group Ltd (ASX: MQG) equities desk, its analysts have upgraded this health and safety products company’s shares to an outperform rating from neutral with a price target of $26.50. The broker made the move on the belief that trading conditions are supportive of organic growth and a pull back in raw material prices could be positively impacting its margins. Given its undemanding valuation Ansell could be worth a closer look if trading conditions are improving.
JB Hi-Fi Limited (ASX: JBH)
Analysts at Morgan Stanley have retained their overweight rating but cut the price target on this retailer’s shares to $28.00 after looking into the retail sector’s performance over the Christmas period. According to the note, the broker’s research indicates that trading over the holiday period was soft. However, it still believes that JB Hi-Fi’s stores may have performed better than most due to being based in high foot traffic locations. In addition to this, it is optimistic that the heightened competition in white goods will ease this year. JB Hi-Fi’s shares do look cheap, but I’m going to hold out until it provides a trading update or its half year results are released.
Sims Metal Management Ltd (ASX: SGM)
A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $13.27 price target on this scrap metal company following the release of the first quarter results of one of its peers. According to the note, Schnitzer Steel Industries reported a 15% lift in ferrous sales volumes and a 5% lift in average sales prices during the quarter. Strong growth was also seen in non-ferrous sales volumes. Goldman believes the trading update shows that the positive momentum seen in the market in 2018 is relatively steady in spite of challenging markets, which it feels bodes well for Sims Metal Management. While it isn’t a share that I would buy, I think Goldman makes a fair point on Sims and it could be worth a closer look.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. 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.