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 $120.00 price target on this payments company's shares. The broker notes that the RBA has indicated that it will allow the company to prevent retailers imposing a surcharge when shoppers use its service. This, together with the prospects of lower debit card fees, is being seen as a big positive for Afterpay. The Afterpay share price is trading at $98.01 on Tuesday.
Estia Health Ltd (ASX: EHE)
A note out of Macquarie reveals that its analysts have upgraded this aged care operator's shares to an outperform rating with a $1.95 price target. While Macquarie expects near term trading conditions to remain uncertain, it notes that government funding could give the sector a boost. In addition to this, the broker likes the company due to its solid balance sheet and robust earnings. The Estia Health share price is fetching $1.75 this afternoon.
Metcash Limited (ASX: MTS)
Analysts at Citi have retained their buy rating and lifted the price target on this wholesale distributor's shares to $4.00. This follows the release of a stronger than expected first half result earlier this week. Looking ahead, the broker believes that its Hardware business can drive growth over the medium term. And while it expects Food sales to moderate, this hasn't stopped the broker from upgrading its earnings forecasts for the next couple of years. The Metcash share price is trading at $3.46 today.
