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 broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:
Evolution Mining Ltd (ASX: EVN)
According to a note out of the Macquarie equities desk, its analysts have retained their outperform rating and $5.40 price target on this gold miner’s shares following its first quarter update. While Evolution’s production in the quarter was in line with its expectations, its costs were higher. Despite this, the broker remains bullish on Evolution and management’s plan to take advantage of high gold prices. Another bonus is that Macquarie believes Evolution could provide a dividend yield of over 4% for a number of years to come. I agree with Macquarie and think Evolution would be a good option if you want exposure to the gold miners.
National Australia Bank Ltd (ASX: NAB)
Analysts at Goldman Sachs have retained their conviction buy rating and $30.40 price target on this banking giant’s shares. According to the note, the broker has been running the rule over the banks after APRA amended capital treatment of investments in subsidiaries. It doesn’t believe there will be any impact on NAB and remains bullish on its prospects. It likes the bank above its peers due to its opinion that NAB has superior revenue momentum and will deliver the strongest earnings per share growth in the group over the next three years. I think Goldman is spot on and would class NAB as a buy.
Nick Scali Limited (ASX: NCK)
A note out of Citi reveals that its analysts have upgraded this furniture retailer’s shares all the way from a sell rating to a buy rating with an improved price target of $6.90. According to the note, the broker believes that yesterday’s profit warning and subsequent sell off is a buying opportunity for investors. Whilst trading conditions may have been tough in the first quarter, it believes the good times are coming. This is due to forward-looking indicators pointing to improvements in trading conditions for retailers with exposure to the housing market. Whilst I agree that this could be a buying opportunity, I intend to wait and see if its performance improves in the second quarter.
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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 National Australia Bank 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.