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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:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of UBS, its analysts have upgraded this fresh milk and infant formula company’s shares to a buy rating from neutral and lifted the price target on them to NZ$17.50 (A$16.69). UBS likes a2 Milk Company due to its strong growth potential in China thanks to its differentiated brand and relatively low market share. And whilst the broker does sees potential changes in regulation as a risk in the future, it remains confident that the company is well-placed to offset the risks. I agree with UBS and feel a2 Milk Company would be a great long term investment.

QBE Insurance Group Ltd (ASX: QBE)

A note out of Citi reveals that its analysts have retained their buy rating and $13.30 price target on this insurance giant’s shares. According to the note, the broker has adjusted its forecasts to reflect strong equity markets and falling bond yields. In respect to the latter, the broker suspects that these could impact its investment income over the medium term, but appears positive on its outlook due to its focus on creating a stronger and simpler business. Whilst I think Citi makes some fair points, I’m not a buyer of insurance companies in this low interest rate environment.

Viva Leisure Ltd (ASX: VVA)

Analysts at Ord Minnett have initiated coverage on this recently listed health club operator’s shares with a buy rating and $1.50 price target. According to the note, the broker believes that FY 2020 could be a solid year for the company thanks to stronger than expected membership numbers and health club openings. It also notes that the company has the option of accelerating its growth through consolidation in a highly fragmented market. It’s a little too soon for me to invest, but I’ll be keeping a close eye on its progress over the next 12 months.

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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 A2 Milk. 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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