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Top brokers name 3 ASX shares to buy next week

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:

Bapcor Ltd (ASX: BAP)

According to a note out of Credit Suisse, it has initiated coverage on this automotive aftermarket parts seller with an outperform rating and $6.95 price target. The broker believes that the rollout of stores and the growth of its private-label products has put Bapcor in a position to outperform the market’s expectations in FY 2019. Its analysts feel this could make it an opportune time to invest in the company’s shares following its recent de-rating. I agree that Bapcor’s valuation is undemanding and think it could be a good investment.

Costa Group Holdings Ltd (ASX: CGC)

A note out of Citi reveals that its analysts have retained their buy rating but reduced their price target on this horticulture company’s shares to $4.45 following its annual general meeting update. According to the note, the broker believes the reasons behind the profit downgrade are only temporary and expects the company to recover in FY 2020. Whilst Costa’s update last week was bitterly disappointing, its shares do look cheap now even for its revised guidance. This could make it worth considering a small investment in its shares.

Qantas Airways Limited (ASX: QAN)

Analysts at Goldman Sachs have retained their conviction buy rating and $6.74 price target on this airline operator’s shares. According to the note, the broker believes that investors should be buying airlines over airports right now. This is because it believes airlines are better positioned to benefit from capacity cuts than airports. Goldman expects the capacity cuts to lead to improved pricing power, which should in turn deliver industry-wide margin improvement. I agree with Goldman Sachs and would class Qantas as a buy.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and COSTA GRP FPO. 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.

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