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 shares are in the buy zone:
Beach Energy Ltd (ASX: BPT)
According to a note out of Citi, its analysts have upgraded this energy producer's shares to a buy rating with a $1.94 price target. The broker believes that Beach Energy's shares are attractively priced at the current level and offer a compelling risk/reward. It also likes the company due to its relative balance sheet strength in comparison to some of its peers. While I think Citi makes some great points, I would prefer to get exposure to energy through a more diversified miner.
Challenger Ltd (ASX: CGF)
Analysts at Credit Suisse have upgraded this annuities company's sharers to an outperform rating with a $4.25 price target. The broker made move largely on valuation grounds after recent share price weakness. It notes that this has left Challenger's shares trading at a large discount to its book value. And while it does acknowledge that the first half of FY 2021 could be difficult, it feels this is largely priced in now. I think it would be best to stay away from Challenger until there has been a notable improvement in its performance.
Reject Shop Ltd (ASX: TRS)
A note out of Morgans reveals that it has initiated coverage on this discount retailer's shares with an add rating and $8.89 price target. According to the note, the broker believes the company's turnaround program could deliver solid results in the coming years. It also sees plenty of room for the company to expand its store network meaningfully in the future. While I'm not a huge fan, I think Morgans makes some good points and Reject Shop could be worth a closer look.
