With earnings season in full swing, brokers across the country have been working overtime on their discounted cash flow models and recommendations.
Three shares that have fared well and been given buy ratings are listed below. Here's why brokers think they are in the buy zone:
Australia and New Zealand Banking Group (ASX: ANZ)
According to a note out of Goldman Sachs, its analysts have retained their conviction buy rating and $29.58 price target on this banking giant's shares following its recent update. Goldman felt that the result highlights that asset quality remains benign, with the bank continuing to benefit from its portfolio rebalancing initiatives. In addition to this, Goldman estimates that the bank's pro forma CET1 ratio is ~11.6% when adjusted for not yet completed asset sales and its buyback. This implies upwards of $4.3 billion in surplus capital, which could mean further capital management from ANZ in the near future.
BHP Group Ltd (ASX: BHP)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $41.00 price target on this mining giant's shares following its half year results release. Macquarie appears to have been very pleased with the result, particularly with its dividend and cash flow. In light of this and favourable commodity prices, the broker appears confident that the company is well positioned to deliver a strong full year result.
Coles Group Ltd (ASX: COL)
Analysts at Citi have retained their buy rating but reduced the price target on this supermarket giant's shares to $13.40 following the release of a softer than expected first half result. Citi appears disappointed that its result fell short of its expectations and has adjusted its full year and FY 2020 estimates to account for its weaker margins. Nevertheless, the broker still sees value in its shares at this level and has held firm with its buy rating.
