A large number of broker notes have hit the wires this week, leading to many popular shares being declared buys and sells.
Three shares that are in favour with brokers and have been given a buy rating are listed below. Here's why they are bullish on them:
BHP Group Ltd (ASX: BHP)
According to a note out of the Macquarie equities desk, its analysts have retained their outperform rating and $41.00 price target on this mining giant's shares after upgrading their oil price forecasts for 2019. In addition to this, the broker has previously advised that it expects BHP to return the majority of its free cash flow to shareholders via buybacks and dividends after its debt fell to targeted levels. I agree with Macquarie and feel that BHP continues to be the best option in the resources sector.
Coles Group Ltd (ASX: COL)
A note out of Citi reveals that its analysts have retained their buy rating and $13.40 price target on this supermarket giant's shares. According to the note, although capital intensity in the industry is increasing due to years of underinvestment, it feels that this is only a minor headwind. Furthermore, despite the increase in capital expenditure, the broker believes that Coles' dividend is sustainable. It expects Coles to pay a 58.4 cents per share dividend in FY 2020, equating to a 4.8% dividend yield. I think Citi is spot on with Coles and believe it is a great option for income investors.
Jumbo Interactive Ltd (ASX: JIN)
Analysts at Morgan Stanley have retained their overweight rating and $20.00 price target on this lottery ticket seller's shares. According to the note, the broker is bullish on Jumbo due to its strong earnings growth potential. It believes the company can grow earnings by a CAGR of 63% between FY 2018 and FY 2021. In addition to this, if the company can successfully expand its software business into the United States, it believes its share price could rise materially higher from here. I agree with Morgan Stanley on Jumbo and would also class its shares as a buy.
