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:
Oil Search Limited (ASX: OSH)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $8.00 price target on this energy producer's shares after it provided a positive update on its PNG LNG operations. The broker was very pleased with the news that the local government has agreed to support the operation and believes it will be a key driver of growth in the future. I think Morgan Stanley has made a good call with Oil Search and feel it could be a great option for investors looking for exposure to energy.
REA Group Limited (ASX: REA)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted the price target on this property listings company's shares to $105.50 ahead of its full year results release this week. According to the note, the broker believes REA Group will have had a soft finish to the financial year, but notes that there are positive lead indicators for the Australian housing market. However, it isn't getting carried away with things just yet and cautioned against expecting a sudden uptick in listings in the near term. I think REA Group would be a great buy and hold option for investors.
Star Entertainment Group Ltd (ASX: SGR)
Analysts at Goldman Sachs have retained their buy rating and $4.80 price target on this casino and resorts operator's shares ahead of its earnings release later this month. According to the note, the broker expects Star Entertainment to provide a positive update on its $40 million to $50 million cost out target. Goldman also appears optimistic that the performance of its main gaming floor could have stabilised thanks to tax cuts, the housing market recovery, and lower interest rates. I think Goldman makes some great points, but I'm not a buyer of its shares at this point.
