Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.
Here's why brokers think investors ought to buy them next week:
Fortescue Metals Group Limited (ASX: FMG)
According to a note out of UBS, its analysts have retained their buy rating and lifted the price target on this iron producer's shares to $19.00. The broker notes that iron ore prices were strong during the third quarter of 2020. This has put Fortescue in a position to generate high levels of free cash flow and reward shareholders handsomely with dividends in FY 2021. I agree with UBS and would be a buyer of Fortescue's shares.
Jumbo Interactive Ltd (ASX: JIN)
Analysts at Morgan Stanley have retained their overweight rating and $14.30 price target on this online lottery ticket seller's shares. This follows the announcement of a deal with Western Australia's Lotterywest for its Powered by Jumbo software-as-a-service (SaaS) platform. Although it sees a few headwinds for Jumbo in the near term, over the long term the broker believes its SaaS business can be a key driver of growth. I think Morgan Stanley is spot on and Jumbo would be a good long term option.
Treasury Wine Estates Ltd (ASX: TWE)
Another note out of Morgan Stanley reveals that its analysts have retained their overweight rating but cut the price target on this wine company's shares to $11.00. Although there are concerns over possible tariffs being placed on Australian winemakers in China because of alleged wine dumping, the broker appears to believe this is more than priced into the Treasury Wine share price. In light of this, it believes the risk/reward on offer with its shares is favourable for investors. While I'm not a huge fan of the company at present, I do agree that its valuation looks reasonable.
