Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.
Here’s why brokers think investors ought to buy them next week:
Domino’s Pizza Enterprises Ltd (ASX: DMP)
According to a note out of Goldman Sachs, its analysts have retained their buy rating and $50.50 price target on the company’s shares after it announced plans to enter the Danish market. Goldman believes that the expansion into Denmark makes a lot of sense due to it bordering its existing franchise territory of Germany. This could lead to greater utilisation of fixed capital in the region. But the biggest driver of growth for Domino’s is likely to be its businesses in Japan and the Benelux region. The broker believes there is a lot of headroom for store roll outs in these markets that will support solid earnings growth. I agree with Goldman on Domino’s and think it could be a good long-term investment.
Macquarie Group Ltd (ASX: MQG)
A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $140.00 price target on this investment bank’s shares after it announced an agreement to purchase US$12.3 billion of assets under management from Foresters Investment Management Company. Morgan Stanley believes this is a good move by Macquarie and continues to see upside for its shares over the next 12 months. I think Morgan Stanley is spot on with this one and agree that Macquarie’s shares are in the buy zone.
St Barbara Ltd (ASX: SBM)
Another note out of Goldman Sachs reveals that its analysts have a buy rating and $3.90 price target on this gold miner’s shares. Although the broker has downgraded its gold price forecast for 2019 by 1% to US$1,343 an ounce, it remains positive on St Barbara after a recent selloff of its shares. Goldman notes that St Barbara’s shares are trading at just 0.92x net present value, offer the best free cash flow yield in the sector, and the lowest EV/EBITDA multiple amongst the major Australian gold miners. Whilst I’m not a buyer of the gold miners due to being bearish on the gold price, St Barbara would be the one I’d buy if I were bullish on the precious metal.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited and Macquarie Group Limited. 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.