It has been another busy week for many of Australia’s top brokers.
With the market digesting countless updates and developments, brokers have been rapidly adjusting their recommendations.
Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these shares are in the buy zone:
Accent Group Ltd (ASX: AX1)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $2.00 price target on this retailer’s shares. The broker notes that Accent Group will close over 500 stores this week for the next four weeks to combat the spread of the coronavirus. Positively, its online websites remain open for business. Whilst this will lead to its sales taking a hit, the broker appears to believe this is more than priced into its shares. Overall, it feels Accent is a retail share to own and expects it to rebound strongly when the crisis passes. I agree with Morgan Stanley and would be a buyer of its shares when market volatility eases.
Nanosonics Ltd. (ASX: NAN)
Analysts at Morgans have retained their add rating but trimmed the price target on this infection control specialist’s shares to $6.97. According to the note, although its technology is not being used to fight the coronavirus, the broker believes the crisis is highlighting the importance of infection control. It expects this to be a boost to Nanosonics’ sales once the pandemic is over. Another positive is that the company has a strong balance sheet with no debt on its books. I agree with Morgans and feel Nanosonics could be a great long-term option for investors.
National Australia Bank Ltd (ASX: NAB)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating but trimmed the price target on this banking giant’s shares to $17.00. Although the broker has downgraded earnings forecasts for the big four banks to reflect the cash rate cut, coronavirus support initiatives, and increasing bad debts, it still sees value in NAB’s shares at the current level. Furthermore, while it expects a reasonably sharp dividend cut to be made, it estimates that its shares still provide a forward fully franked ~8% dividend yield. I agree with Macquarie and feel NAB could be worth considering.
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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 Nanosonics Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Accent Group and Nanosonics 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.
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