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 S&P/ASX 200 Index (ASX: XJO) shares are in the buy zone:
Appen Ltd (ASX: APX)
According to a note out of Credit Suisse, its analysts have upgraded this machine learning services company's shares to an outperform rating but cut the price target on them to $22.00. Although the broker expects Appen's performance to be impacted by a period of softer demand due to broad economic weakness, it remains confident in the long term. It also sees value in its shares after a sharp pullback over the last few weeks. I agree with Credit Suisse and would be a buyer of its shares once the volatility eases.
Aristocrat Leisure Limited (ASX: ALL)
Analysts at Ord Minnett have retained their buy rating but cut the price target on this gaming technology company's shares to $30.00. According to the note, it expects the closing of casinos and social distancing initiatives to weigh on its pokie machine business. It has adjusted its earnings estimates to reflect this. However, the broker remains optimistic on Aristocrat due to its growing Digital business. It also suspects the company could come out of this with a stronger land-based presence when market conditions return to normal. I agree with Ord Minnett and feel the pullback in its share price is a buying opportunity.
Breville Group Ltd (ASX: BRG)
A note out of the Macquarie equities desk reveals that its analysts have upgraded this appliance maker's shares to an outperform rating with a lowered price target of $16.00. According to the note, the broker believes Breville is a good option in the retail sector due to its strong balance sheet, positive cash flows, and because it doesn't own stores. It sees this as an advantage in a tough retail market. I think Macquarie makes some good points and Breville could be worth considering.
