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:
Aristocrat Leisure Limited (ASX: ALL)
According to a note out of UBS, its analysts have retained their buy rating and $34.10 price target on this gaming technology company’s shares. Its analysts have been looking at industry data and appear confident that its performance has been strong amongst most product groups. Overall, it believes that Aristocrat Leisure is capable of delivering net profit after tax in excess of $1 billion in FY 2020. I agree with UBS on this one and would class its shares as a buy.
Costa Group Holdings Ltd (ASX: CGC)
Another note out of UBS revealed that its analysts have retained their buy rating and $5.20 price target on this horticulture company’s shares. According to the note, the broker has a few concerns over risks to its calendar year guidance due to weaker mushroom prices. However, it remains upbeat on its medium term earnings growth. Whilst I agree that Costa could be a good long-term investment, I would like to wait and see if it achieves its guidance for calendar year 2019 before picking up shares.
Suncorp (ASX: SUN)
A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $14.55 price target on this insurance and banking giant’s shares following its decision to offload the Capital SMART smash repair business to AMA Group Ltd (ASX: AMA) for $420 million. According to the note, the broker is positive on Suncorp due to its strong outlook for income/capital management. In light of this asset sale, the broker suspects that it could add further longevity to its capital management. Goldman continues to forecast an 8 cents per share special dividend from Suncorp in FY 2020. Whilst I think the broker makes some very good points, I’m still sitting on the fence with Suncorp at this stage.
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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 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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