Many of Australia's top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.
Three buy ratings that have caught my eye are summarised below. Here's why brokers think these ASX shares are in the buy zone:
Costa Group Holdings Ltd (ASX: CGC)
According to a note out of Credit Suisse, its analysts have retained their buy rating and lifted the price target on this horticulture company's shares to $6.00 after visiting its operations in China. The broker appears increasingly confident in the company's prospects after the site visit and has upgraded its earnings estimates to reflect this. I agree with Credit Suisse on Costa Group and believe the pullback in its share price this year is a buying opportunity.
Freedom Foods Group Ltd (ASX: FNP)
Analysts at Citi have retained their buy rating and $6.55 price target on this diversified food company's shares after attending its investor day. According to the note, the broker is pleased with how Freedom Foods' dairy capacity expansion program is going and believes that demand for its UHT is growing in Asia. Combined with the recent commencement of lactoferrin production, Citi believes that Freedom Foods is well-positioned to deliver strong sales growth and margin expansion over the next few years. I think Citi is spot on and believe Freedom Foods could be a great investment.
Praemium Ltd (ASX: PPS)
A note out of Morgans reveals that its analysts have retained their add rating but sliced the price target on this investment platform provider's shares to 60 cents. According to the note, the broker believes that the loss of the ANZ Private contract to Netwealth Group Ltd (ASX: NWL) demonstrates that competition in the industry is increasing. However, given the sharp selloff this month, it sees value in Praemium's shares at the current level. Whilst I agree that Praemium's shares look attractive at this level, I do have concerns over the increasing competition.
