The S&P/ASX 200 Index (Index:^AXJO) is surging higher and the good times are likely to roll on. Markets are embracing a Joe Biden US presidency and prospects of greater central bank stimulus.
It’s hard to see what could sink the ongoing rally – barring an unexpected black swan event. This should clear the way for a decent Santa Rally.
Here are the latest three ASX stocks that brokers are urging you to buy today.
Buy Macquarie for rebound potential
The Macquarie Group Ltd (ASX: MQG) share price is one to watch following its first half profit results.
The bank’s interim dividend of $1.35 was around 8% below consensus and the slightly better than expected profit result was driven by the “lumpy” divisions in the bank.
But Morgan Stanley isn’t perturbed and it reiterated its “overweight” recommendation on the Macquarie share price.
“We think 1H21 was a low point for earnings,” said the broker.
“The combination of a better outlook for gains on sale & performance fees, solid MIRA flows, and lower impairments should stabilise earnings in 2H21, with 30% recovery in FY22, in our view.”
What’s more, Morgan Stanley reckons impairment losses at the bank has peaked with better than expected outcomes for most divisions.
The broker’s 12-month price target on the stock is $148 a share.
Well wrapped for Santa Rally
Meanwhile, the Amcor CDI (ASX: AMC) share price is another to put on your watchlist following its quarterly results.
The analysts at Macquarie repeated the “outperform” rating on the packaging group as they describe Amcor as an attractive, resilient and defensive business.
“The US has been a strong point for most companies in Q3, and AMC was no exception, with North America flexibles vols up mid-single digit (vs low single digit in 2H20),” said the broker.
“Rigids also saw improved momentum, with vols +4% vs +1% in 2H20, driven by improved sequential demand in the US convenience channel and likely pantry-filling (again) of Gatorade.”
Despite these positives, the Amcor share price is trading at a discount to peers and its historical average.
Amcor is priced at a 20% discount to the ASX 100 when the 10-year average is a 7% premium. Macquarie’s 12-month price target on Amcor is $17.85 a share.
The good oil to fire up the NUF share price
The embattled Nufarm Limited (ASX: NUF) share price could make a comeback with Citigroup reiterating its “buy” call on the stock.
There is a close to 50% total return upside to the NUF share price based on the broker’s estimates. Earnings growth from the agri-business group’s omega-3 oil enriched canola seeds is a key driver for this bullish call.
“While the initial earnings contribution should be small, we see omega-3 canola as a material long term earnings driver for Nufarm,” said Citi.
“Based on our own bottom-up analysis of fish oil demand for the global aquaculture industry, we estimate a ~418kt pa demand deficit will emerge by 2028.”
The new omega-3 products is estimated to be worth up to $1.57 a share for Nufarm and Citi’s 12-month price target on the stock is $5.30 a share.