Australia’s top brokers have been busy adjusting their estimates and recommendations 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) are in the buy zone:
Appen Ltd (ASX: APX)
According to a note out of UBS, its analysts have retained their buy rating and $32.00 price target on this artificial intelligence company’s shares. UBS appears pleased to see that Appen has been able to reaffirm its guidance for FY 2020 despite the coronavirus pandemic. It expects to post underlying EBITDA of $125 million to $130 million in FY 2020. This represents an increase of 23.8% to 28.7% on FY 2019’s result. I agree with UBS on Appen and feel it would be a great option for investors.
InvoCare Limited (ASX: IVC)
A note out of Morgans reveals that its analysts have retained their add rating and lifted the price target on this funerals company’s shares to $13.36. According to the note, the broker expects InvoCare’s capital raising to allow it to comfortably navigate the tough trading conditions. Outside this, it believes InvoCare’s long term growth prospects are solid. While I think Morgans makes some great points, I intend to wait until the pandemic passes before considering an investment.
Telstra Corporation Ltd (ASX: TLS)
Another note out of UBS reveals that its analysts have retained their buy rating and $3.70 price target on this telco giant’s shares. According to the note, the broker expects travel bans to weigh on roaming revenue and suspects that small business debts will rise. In light of this and other factors, it believes the company will cut its dividend down from 16 cents to 14 cents per share. I agree with UBS that Telstra is a buy, though I’m optimistic it will not cut its dividend. Though, even if it did, its shares would still provide a decent fully franked yield of 4.5%.
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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 Telstra Limited. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended InvoCare 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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