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:
Afterpay Touch Group Ltd (ASX: APT)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $44.00 price target on this payments company’s shares. The broker believes recent share price weakness has left its shares oversold, making this a buying opportunity for investors. Furthermore, the broker is not worried by regulatory concerns following the payments review announced by the RBA. It doesn’t feel BNPL is big enough for regulation, nor does it believe that retailers would surcharge customers using Afterpay. I agree with Morgan Stanley and would class Afterpay as a buy.
Megaport Ltd (ASX: MP1)
A note out of Morgans reveals that its analysts have retained their add rating and lifted the price target on Megaport’s shares to $11.38. According to the note, the broker was pleased with the elastic interconnection services provider’s first quarter update. It doesn’t believe investors should be concerned by the lower number of new data centres added to its network during the quarter. This is because Megaport was more focused on installing its new product in existing centres. I think Morgans is spot on and believe it could be a good long term investment option.
Super Retail Group Ltd (ASX: SUL)
Analysts at Citi have retained their buy rating and $9.90 price target on this retailer’s shares following its first quarter update. According to the note, the broker felt that its performance was solid during the quarter. And while margin concerns have led to a slight downward revision to Citi’s earnings forecasts, it remains positive on the investment opportunity. Once again, I think this is another recommendation worth acting on. Especially after a pullback in its share price yesterday.
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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 AFTERPAY T FPO and MEGAPORT FPO. The Motley Fool Australia owns shares of Super Retail Group Limited. The Motley Fool Australia has recommended MEGAPORT 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.