With earnings season just around the corner and a number of trading updates being released this month, 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 Morgans, it has retained its add rating and adjusted its price target slightly to $18.88. The broker continues to be impressed with the company's underlying growth trends and believes there could be further upside from its international expansion opportunities. In addition to this, despite regulatory concerns hanging over the company, it believes that the Afterpay platform's growth story is firmly intact. I agree with Morgans on Afterpay Touch and feel it would be a great long-term investment, though it is a reasonably high risk one.
Santos Ltd (ASX: STO)
Analysts at Ord Minnett have retained their buy rating and lifted the price target on this energy producer's shares to $7.30. According to the note, the broker was pleased with Santos' performance during the December quarter, with production coming in ahead of its expectations and sales beating guidance. Ord Minnett appears optimistic on its prospects in FY 2019 and sees value in its shares at this level. If you think that oil prices will remain at current levels or go higher then I think Santos could be a great option in the energy sector, but if you think they'll soften then I would stay clear of its shares.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
A note out of Morgan Stanley reveals that its analysts have upgraded this airport operator's shares to an overweight rating, albeit with a reduced price target of $7.07. According to the note, the broker believes that value has emerged after the recent pullback in its share price. Furthermore, its analysts note that its shares are trading at a good price in comparison to its global peers. Sydney Airport's shares have come under pressure in recent months due to moderating passenger growth, but Morgan Stanley doesn't believe investors should be overly concerned and expects the airport to benefit from a diversity of traffic sources. I like Sydney Airport at these levels and would agree that it is a buy.
