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Top brokers name 3 ASX shares to buy next week

broker Buy Shares

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:

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 cloud-based human resources and payroll platform provider’s shares. This follows the company’s acquisition of UK-based Breathe last week. On the whole, Morgan Stanley appears to believe this acquisition fits with the company’s strategy and has held firm with its positive rating. I agree with Morgan Stanley and would be a buyer of ELMO’s shares next week.

Fortescue Metals Group Limited (ASX: FMG)

Analysts at Ord Minnett have retained their buy rating and $20.00 price target on this iron ore producer’s shares. According to the note, the broker is expecting Fortescue to report another solid quarterly update later this month. It is also expecting favourable iron ore prices to have boosted Fortescue’s cash position materially. This is expected to result in a dividend of approximately $2.65 in FY 2021. I think Ord Minnett is spot on and Fortescue would be a great option, especially for income investors.

Westpac Banking Corp (ASX: WBC)

A note out of the Macquarie equities desk reveals that its analysts have upgraded this banking giant’s shares to an outperform rating with an improved price target of $18.00. The broker made the move on the belief that all of Westpac’s issues are now fully understood by the market. In light of this and its underappreciated business mix, the broker believes Westpac’s shares are attractively priced now. I agree with Macquarie and feel Westpac would be a good option for investors looking for exposure to the banking sector.

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Returns as of 6th October 2020

James Mickleboro owns shares of Westpac Banking. 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. 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.

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