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 ASX shares are in the buy zone:
Collins Foods Ltd (ASX: CKF)
According to a note out of Morgans, its analysts have retained their add rating and lifted their price target on this quick service restaurant operator's shares to $10.23. The broker made the move after Collins Foods delivered a stronger than expected FY 2020 full year result this week. Morgans was also pleased with the KFC Australia business' strong start to FY 2021 and the Taco Bell business rebounding close to pre-COVID 19 levels. I agree with Morgans and feel Collins Foods would be a good long term option.
Jumbo Interactive Ltd (ASX: JIN)
Analysts at Morgan Stanley have retained their overweight rating but lowered their price target on this lottery ticket seller's shares to $12.50. According to the note, although Jumbo has signed a new long term reseller agreement with Tabcorp Holdings Limited (ASX: TAH) on less favourable terms, it still sees value in its shares and growth opportunities for its SaaS business. Furthermore, despite the less than favourable terms, Morgan Stanley believes Jumbo can deliver strong earnings growth over the coming years. I agree with the broker on this one. Although this agreement is disappointing, it does remove the risk of Tabcorp pulling the plug on their relationship in the near future.
Qantas Airways Limited (ASX: QAN)
A note out of the Macquarie equities desk reveals that its analysts have resumed coverage on this airline operator's shares with an outperform rating and $4.35 price target. According to the note, the broker believes that Qantas' recovery plan and cost reductions will lead to it becoming a more profitable airline in the future. Though, given the current state of travel markets, a return to profit could take until FY 2023. If everything goes to plan with Qantas' recovery, I think it could prove to be a good investment.
