There's no denying that ASX shares are starting to look fully priced. But there's still value to be found as top brokers have just upgraded three to "buy".
These ASX stocks are part of the S&P/ASX 200 Index (Index:^AXJO), which is on track to chalk up its fourth straight day of gain this week.
No wonder experts are worried about overstretched valuations as the market jumped 32% since hitting the bear market low in March.
While we may not have seen the worst of the economic impact from the COVID-19 pandemic, brokers don't think you should wait to buy the following stocks.
The right minerals
The Iluka Resources Limited (ASX: ILU) share price jumped 2.4% to $9.01 in after lunch trade after Goldman Sachs upgraded the mineral sands miner to "buy" from "neutral".
The broker turned bullish following Iluka's latest market update on its mineral sands and rare earth project pipeline.
Iluka's attractive valuation, the upside from its demerger of royalty generating MAC asset, improving mineral sands sales and Goldman's prediction of a zircon supply deficit in 2021 prompted the upgrade.
The broker's 12-month price target on the stock is $10.10 a share.
Property bounce back
Another stock that's outperforming today is the Stockland Corporation Ltd (ASX: SGP) after the federal government announced its $688 million HomeBuilder stimulus and Morgan Stanley upgraded the stock.
But the government's stimulus is only one reason why the broker lifted its recommendation on Stockland to "overweight" from "equal-weight".
The proposed change to stamp duty and property tax and a faster than expected reopening of retail outlets in malls owned by Stockland are additional factors behind the upgrade.
The broker increased its price target on the stock to $4.30 from $3.10 a share.
On a recovery path
The aluminium-alumina market has been hit by the coronavirus shutdown but the gradual reopening of the global economy is set to drive prices for the commodity higher, according to UBS.
The expected turnaround prompted the broker to upgrade its recommendation on Alumina Limited (ASX: AWC) to "buy" from "neutral".
This could explain why the Alumina share price jumped 2.9% to $1.69 in late afternoon trade.
"We estimate that ~50% of the alumina industry is loss making at today's spot price of US$250/t," said the broker.
"This is unsustainable on a medium- to long-term basis and with costs rising (caustic soda and energy), we believe cost push should support a higher alumina price."
UBS increased its 12-month price target on the stock to $2.10 from $1.50 a share.
