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 ASX 200 shares are in the buy zone:
ELMO Software Ltd (ASX: ELO)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $9.00 price target on this HR and payroll software company’s shares. This follows the release of its full year results on Thursday. Although the broker notes that ELMO’s guidance for FY 2021 is a little softer than the market was expecting, it believes it is positive that it is actually in a position to provide guidance. Overall, it remains very positive on its long term prospects and retains its overweight rating. I agree with Morgan Stanley and feel the post-results pullback in the ELMO share price is a buying opportunity. Especially given its growth through acquisition plans.
Nick Scali Limited (ASX: NCK)
Analysts at Citi have retained their buy rating and lifted the price target on this furniture retailer’s shares to $9.80. According to the note, the broker believes that Nick Scali’s first half profit guidance of 50% to 60% growth may prove conservative. In addition to this, it believes the market is overlooking its strong balance sheet which could be used for acquisitions. I think Citi makes some great points and Nick Scali could be worth considering.
ResMed Inc. (ASX: RMD)
A note out of Morgans reveals that its analysts have retained their add rating and lifted the price target on this medical device company’s shares to $29.33. The broker notes that ResMed’s fourth quarter profit result was ahead of its expectations. This was driven by very strong ventilator sales due to the pandemic. And although it suspects that the first half of FY 2021 will be challenging, it appears optimistic that its outlook is very positive on the other side of the pandemic. Especially given its growing installed base and its large addressable market. I agree with Morgans and believe the recent weakness in the ResMed share price is a buying opportunity.
These 3 stocks could be the next big movers in 2020
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia has recommended Elmo Software and ResMed Inc. 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.
- BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week – September 22, 2020 1:29pm
- Leading brokers name 3 ASX shares to sell today – September 22, 2020 1:04pm
- ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results – September 22, 2020 12:00pm