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:
Carsales.Com Ltd (ASX: CAR)
According to a note out of the Macquarie equities desk, its analysts have upgraded this auto listings company's shares to an outperform rating with a $15.30 price target. This follows the recent release of a trading update by Carsales. Macquarie notes that the company has a robust balance sheet and appears well-positioned to ride out the tough trading conditions it is experiencing. In addition to this, it appears confident that Carsales' platform will continue to be the dominant force in the industry when trading conditions recover. While I agree with Macquarie on its points, I think there are better value options in the online listings sector.
Insurance Australia Group Ltd (ASX: IAG)
Analysts at Morgan Stanley have upgraded this insurance giant's shares to an overweight rating with a $7.00 price target. According to the note, the broker believes its shares are very good value at the current level. It also likes the company due to its defensive characteristics and view that general insurance will be reasonably resilient during the recession. I think Morgan Stanley makes some good points on Insurance Australia Group. It could be worth a closer look.
Telstra Corporation Ltd (ASX: TLS)
A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and $4.20 price target on this telco giant's shares. According to the note, it feels that Telstra's defensive qualities are being underappreciated by the market. It notes that telco earnings are defensive and recurring, with limited correlation to consumer household expenditures and GDP growth. The broker also believes Telstra is well-placed to navigate the crisis from a balance sheet perspective. I agree with Goldman Sachs on Telstra and would be a buyer of its shares.
