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:
Afterpay Ltd (ASX: APT)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and lifted the price target on this payments company's shares to $106.00. This follows the announcement of its expansion into mainland Europe via the acquisition of Spain-based Pagantis. In addition to this, the broker has upgraded its estimates to reflect stronger than expected app downloads in the United States. I agree with Morgan Stanley and believe Afterpay would be a great buy and hold option.
Nanosonics Ltd (ASX: NAN)
Analysts at UBS have retained their buy rating but trimmed the price target on this infection prevention company's shares to $7.20 following its FY 2020 results. The broker notes that Nanosonics was impacted greatly by the pandemic and is likely to continue being impacted in FY 2021. This is due to a reduction in market access and a slower consumable products recovery. And while this has led to UBS downgrading its estimates, it remains positive on the future. It believes Nanosonics is a quality company and structural growth story. I think UBS is spot on and it would be worth being patient with Nanosonics.
NIB Holdings Limited (ASX: NHF)
A note out of the Macquarie equities desk reveals that its analysts have upgraded this private health insurer's shares to an outperform rating with an improved price target of $5.15. While the broker notes that NIB delivered a full year result that fell short of expectations in FY 2020, it believes recent share price weakness has left it trading at an attractive level. Especially given its sizeable discount to peers. Although I think Macquarie makes some good points, I'm not a buyer at this point. I have concerns about the industry due to affordability issues.
