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:
Class Ltd (ASX: CL1)
According to a note out of Morgans, its analysts have upgraded this SMSF platform provider’s shares to an add rating and lifted the price target on them to $1.41. The broker appears to be pleased with the company’s decision to explore opportunities beyond super to grow its marketplace. Although this will come at a cost, it has the potential to be extremely rewarding if successful and would make Class a much more attractive investment option. Whilst I agree with Morgans on this, I intend to wait and see what happens in the next 12 months before considering an investment.
Super Retail Group Ltd (ASX: SUL)
A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $10.60 price target on this retailer’s shares. According to the note, the broker was pleased with its full year results and appears confident that FY 2020 will be another solid year. It expects the BCF business to benefit from a recovery in the mining cycle due to its stores being skewed towards mining states. In addition to this, Goldman believes the company has material cost cutting opportunities. One of which would be the potential consolidation of support offices and distribution centres. I think Goldman Sachs is spot on and would also class Super Retail as a buy.
Westpac Banking Corp (ASX: WBC)
Analysts at Credit Suisse have upgraded this banking giant’s shares to an outperform rating with an improved price target of $30.55. According to the note, the broker made the move largely on valuation grounds after its shares fell to some of their lowest levels (relative to the rest of the sector) in a decade. It is also worth noting that the broker remains positive on Westpac despite its belief that a capital raising and a dividend cut could be coming in the near term. I would have to agree that it would be a good option for investors with little exposure to the banking sector.
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of Class Limited and Super Retail 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.