With earnings season continuing to gather pace, brokers across Australia have been kept very busy this week. This has led to a large number of broker notes hitting the wires.
Three that caught my eye are summarised below. Here's why these shares have been given buy ratings:
Cleanaway Waste Management Ltd (ASX: CWY)
According to a note out of the Macquarie equities desk, its analysts have retained their outperform rating and increased the price target on this waste management company's shares to $2.60 following its half year results release. In the first half of FY 2019 Cleanaway posted a 46.4% increase in gross revenue to $1,149.7 million and a 52.6% lift in underlying net profit after tax to $67 million. Macquarie's analysts appeared to be impressed by this result, which smashed its estimates. The company's key Solid Waste segment was picked out as a highlight, growing net revenue by 30.2% to $682.4 million and EBITDA by 26.2% to $175.7 million. I like Cleanaway and see it as a quality defensive option.
Magellan Financial Group Ltd (ASX: MFG)
Analysts at Citi have retained their buy rating and lifted the price target on this fund manager's shares to $35.30 after the release of a stronger than expected half year result. According to the note, the broker believes the company's strong performance is likely to drive further fund inflows in the future, possibly leading to a re-rating of its shares. In addition to this, Citi notes that the company now has its eye on the retirement market. I agree with Citi and think Magellan could be well worth considering.
Telstra Corporation Ltd (ASX: TLS)
A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and lifted the price target on this telco giant's shares to $3.70 following its half year result. According to the note, Telstra's half year result came in ahead of the broker's expectations. As a result, Goldman believes it is well positioned to achieve the top end of its EBITDA guidance range in FY 2019. Its analysts have downgraded their dividend expectations to 16 cents for this year and through to FY 2021, but remain confident its dividend will return to growth in FY 2022.
