Earlier today I looked at three shares that have fallen out of favour with brokers this week and been given the dreaded sell rating.
Three shares that are in favour and rated as buys right now are listed below. Here's why brokers are bullish on them:
Adairs Ltd (ASX: ADH)
Analysts at UBS have retained their buy rating and trimmed the price target on this homewares retailer's shares following its half year results. According to the note, the broker thought Adairs delivered a solid result in the first half and was impressed by its revenue growth. UBS notes that the company's omni-channel approach is bearing fruit and driving solid sales growth both online and in-store. Overall, the broker was pleased with the result and believes its shares are trading on an undemanding valuation. I completely agree with UBS on this one and feel Adairs is a great option for value and income investors.
Afterpay Touch Group Ltd (ASX: APT)
According to a note out of Goldman Sachs, its analysts have retained their conviction buy rating and increased the price target on this payments company's shares from $19.25 to $21.00 following the release of its half year results. The broker was impressed with its traction in the U.S. market and pleased to see management's FY 2022 target of merchant sales in excess of $20 billion and a net transaction profit margin of 2%. Overall, the broker believes there are few companies with as strong revenue growth potential over the next few years as Afterpay Touch. I agree and believe it would be a great long-term investment.
FlexiGroup Limited (ASX: FXL)
A note out of Deutsche Bank reveals that its analysts have upgraded this financial services company's shares to a buy rating with a $1.80 price target. According to the note, the broker was pleased with the performance of its Certegy business during the half. The buy now, pay later business grew cash net profit by 9% during the half to $17.4 million. Overall, Deutsche believes that FlexiGroup's shares are trading on an undemanding valuation and offer upside potential from new initiatives. Whilst it wouldn't be my first pick in the industry, I was impressed with the performance of the Certegy business during the half.
