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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 retained their buy rating on this infant formula and fresh milk company’s shares but reduced their price target on them to NZ$16.20 (A$15.11). Although it expects margins to fall as it increases its marketing investment to win market share, it expects margins to recover from FY 2023. And with the investment likely to make a2 Milk Company a bigger and profitable company, they appear to believe it is worth sticking with it. I agree with UBS on this one and see it as a good buy and hold option.

CSL Limited (ASX: CSL)

A note of Morgan Stanley reveals that its analysts have upgraded this biotherapeutics company’s shares to an overweight rating and lifted the price target on them to $251.00. According to the note, the broker believes that the tight immunoglobulin market means that CSL’s supply increase is being absorbed. This could mean there is upside risk to its earnings guidance in FY 2020. And while it sees the potential for disruption in the industry in the future, it doesn’t believe this will be for a few years. I agree with Morgan Stanley and would class its shares as a buy.

Nufarm Limited (ASX: NUF)

Equity analysts at Credit Suisse have retained their outperform rating on this agricultural chemicals company’s shares and lifted the price target on them to $8.30. According to the note, the broker was pleased with Nufarm’s decision to offload its South American business at a good price. It notes that this has removed financing risk and expects the market to appreciate its lower leverage. In addition to this, the broker has previously spoken very positively about the prospects of its omega-3 canola oil business. I agree that Nufarm is a much more attractive option for investors now its balance sheet is stronger.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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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