Top brokers pick the latest ASX stocks to buy today

Growing confidence that the worst is over for the COVID-19 pandemic is fuelling the ASX 200 rally. Here are three stocks brokers think are a "buy" in this market.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Market bulls have gained the upper hand with the S&P/ASX 200 Index (Index:^AXJO) jumping 1.8% today.

The world appears to finally be in control of the COVID-19 pandemic and investors are willing to look past the recession and into the recovery.

But investors shouldn't get ahead of themselves. The fact that the big four banks have finished the session at their intraday lows shows the rebound remains vulnerable.

If you are looking for ASX shares that might hold their ground better, here are the latest buy ideas from leading brokers.

Bountiful harvest

One stock that UBS is backing is Graincorp Ltd (ASX: GNC). The broker just reiterated its "buy" call on the grain handler as it believes the risk-reward is favourable after management posted a better than expected profit result.

There are also signs that the drought is breaking in parts along the eastern seaboard where Graincrop focuses on. This bodes well for our winter crop.

Further, the group's balance sheet looks healthy with net cash of $5 million from its core businesses post demerger of UMG and divestment of the Bulk Liquid Terminals.

UBS' 12-month price target on Graincorp is $4.50 a share.

Turning a corner

Meanwhile, Morgans reaffirmed its "add" recommendation on Superloop Ltd (ASX: SLC) after the broadband services company's latest trading update.

The broker thinks Superloop is at a turning point after struggling with operational issues over the past year or so.

"Both 1H20 and 2H20 results, ex the COVID-19 overlay which is clearly not management's fault, have been in-line with our expectations," said Morgans.

"This implies that after several years of being in an earnings downgrade cycle, FY20 looks to be the base year, from which to grow."

The broker's price target on the stock is $1.30 a share.

Good prognosis

Another stock for the watchlist is medical diagnostic group Sonic Healthcare Limited (ASX: SHL). Citigroup highlighted the stock as a "buy" after running several COVID-19 test scenarios.

The stock fell out of favour at the start of the pandemic because investors were worried that what it will make from running COVID-19 tests will not be enough to offset the drop in demand for its traditional services.

The broker estimates that the total market opportunity in the US alone from coronavirus testing stands at around US$6 billion for the six months to the end of calendar 2020.

"Assuming a SHL market share of 5%, it would increase group 1H21 revenue/EBITDA/NPAT by up to 13%/31%/63% over our baseline forecasts of 'business as usual', all else equal," said the broker.

While there are some caveats to the forecast, the broker believes Covid-19 testing could provide a significant cushion against a drop in the base business.

"Under the 5% mkt share scenario the group's global revenue would have to decline by 13% in 1H21 to offset the contribution from US Covid-19 testing," explained Citigroup.

The broker's 12-month price target on Sonic is $32.50 a share.

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of SUPERLOOP FPO. The Motley Fool Australia has recommended Sonic Healthcare 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.

More on Cheap Shares

Couple at an airport waiting for their flight.
Cheap Shares

Is Qantas a bargain ASX 200 stock today?

Analysts at Goldman Sachs think the Flying Kangaroo could be dirt cheap.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Cheap Shares

1 secretly cheap ASX 200 stock I'm buying for the long run

The best performer on the index last year has had a poor start to 2024. Let's examine whether this is…

Read more »

A young woman sits on her bed holding a cup of coffee inside her recreational vehicle hired through the Camplify website
Cheap Shares

3 struggling ASX shares to buy at a discount

These stocks are down temporarily because of temporary issues. This could be a golden opportunity to buy cheap.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Cheap Shares

2 'materially undervalued' ASX 200 shares to buy while they're at 'attractive value'

Is there a better feeling in investing than grabbing stocks for cheap then watching while everyone else catches on to…

Read more »

Five happy young friends on the coast, dabbing and raising their arms in the air.
Cheap Shares

5 oversold ASX shares to buy in March 2024

Will you get 'em while they're cheap?

Read more »

Rocket takes off from the hand of a businessman.
Cheap Shares

11% yield? 2 strikingly cheap ASX shares 'primed for recovery'

Discounted stocks are sometimes a value trap, but experts reckon this pair is ready to soar again.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Cheap Shares

1 top ASX bargain stock that's ready for a bull run!

The market savaged these shares during reporting season, but multiple experts are bullish for the years to come.

Read more »

Three young women on holidays smile at they look at a map.
Cheap Shares

Long-term investing: 3 top ASX stocks you can buy for under $20 a share

These shares don't cost the earth to add to the portfolio, but all represent businesses going places.

Read more »