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:
Altium Limited (ASX: ALU)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating but trimmed the price target on this electronic design company’s shares to $37.00. According to the note, Macquarie remains positive on Altium after its market update this week. Especially given its high level of recurring revenues and strong balance sheet. And while it acknowledges that the COVID-19 pandemic could impact its sales in the short term, it expects them to pick up again once it passes. I agree with Macquarie and would be a buyer of Altium’s shares.
Flight Centre Travel Group Ltd (ASX: FLT)
According to a note out of UBS, its analysts have retained their buy rating but cut the price target on this travel company’s shares to $16.60. The broker has been assessing the company’s prospects following its $700 million capital raising and announcement of major cost reductions. As things stand, it believes Flight Centre is positioned to be able to cover its costs for almost one year without earning revenue. Though, it appears optimistic this will not need to be tested. The broker expects Flight Centre’s earnings to bottom next year before recovering through to 2023. Whilst I agree with UBS, I would prefer to wait for signs that the travel market is returning to normal again before investing.
JB Hi-Fi Limited (ASX: JBH)
Another note out of UBS reveals that its analysts have upgraded this retailer’s shares to a buy rating with a $39.70 price target. The broker believes the coronavirus pandemic could have a major impact on the housing market and put pressure on house prices. Whilst it fears this will likely be a headwind for household goods sales in FY 2021, it remains positive on JB Hi-Fi. It feels it has significant capacity to withstand the downturn and sees the potential for market consolidation when the pandemic passes. I think UBS makes some good points and JB Hi-Fi could be worth considering.
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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 and has recommended Flight Centre Travel Group Limited. The Motley Fool Australia owns shares of Altium. 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.