With earnings season well underway and results coming in thick and fast, Australia’s leading brokers have been kept on their toes this month.
As you might expect, this has led to the release of a large number of broker notes.
Three buy ratings that have caught my eye today are listed below. Here’s why brokers are bullish on them:
Baby Bunting Group Ltd (ASX: BBN)
According to a note out of the Macquarie equities desk, its analysts have upgraded this baby products retailer’s shares to an outperform rating with an increased price target of $2.65. The broker made the move after Baby Bunting delivered a solid first half result last week. It now believes the company is well-positioned to achieve the high end of its EBITDA guidance range of $25 million to $27 million. I agree with Macquarie on Baby Bunting and think it would be a great option for investors looking for exposure to the retail sector.
Medibank Private Ltd (ASX: MPL)
A note out of Deutsche Bank reveals that its analysts have retained their buy rating and $3.10 price target on this private health insurer’s shares following its half year results release. According to the note, the broker thought that Medibank’s result was strong and appears pleased to see potential capital management on the horizon. In addition to this, Deutsche believes the market has overreacted to concerns over potential caps on premium increases and appears confident in its outlook. While I do think Deutsche makes a fair point, I plan to hold off an investment and see how the company fares over the next 12 months.
Tassal Group Limited (ASX: TGR)
Analysts at Goldman Sachs have retained their buy rating and increased the price target on this salmon and seafood producer’s shares to $5.50 following its half year results. According to the note, the broker was pleased with its strong half year results and that earnings came in ahead of the its expectations. Looking ahead, the broker believes that medium term supply demand dynamics are favourable and should support a positive price outlook for the foreseeable future. I think Goldman is spot on with Tassal and feel it could be worth a closer look.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.
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