With earnings season just around the corner and a number of trading updates being released last week, brokers have been busy adjusting their discounted cash flows and recommendations accordingly.
Three shares that have fared well and been given buy ratings are listed below. Here's why brokers are bullish on them:
Afterpay Touch Group Ltd (ASX: APT)
According to a note out of Goldman Sachs, its analysts have retained their buy rating and $19.25 price target on this payment solutions company's shares following its business update. The broker appears to have been impressed with the company's performance in the first half, noting that almost all "topline metrics are currently ahead of our assumptions". Last week Afterpay Touch reported $2.2 billion in underlying first half sales, up a massive 140% on the prior corresponding period. While it is a high risk investment, I would agree with Goldman Sachs that it is a buy.
Kogan.com Ltd (ASX: KGN)
Analysts at UBS have retained their buy rating and $5.50 price target on this ecommerce company's shares following the release of a trading update last week. That update revealed that Kogan bounced back after a weak start to FY 2019 and had a strong Christmas trading period. As a result, the company expects to report a 9.7% increase in first half revenue. UBS was pleased with the improvements and held firm with its buy recommendation. I like Kogan but I intend to hold off an investment until I've seen its half year results.
Rio Tinto Limited (ASX: RIO)
Another note out of Goldman Sachs reveals that its analysts have retained their buy rating and increased their price target on this mining giant's shares to $88.00 following its fourth quarter production update. Goldman was pleased with its strong fourth quarter production, especially iron ore, copper, and bauxite which were at the high end of guidance. The broker also believes its guidance for FY 2019 is positive. I agree with Goldman and think Rio Tinto is a great option for investors looking for exposure to the resources sector.
