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:
Altium Limited (ASX: ALU)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $40.00 price target on this electronic design software provider's shares. The broker was pleased to see that Altium recently reaffirmed its FY 2021 guidance despite the tough operating environment. In addition to this, Morgan Stanley notes that management spoke positively about its new Altium 365 platform. This is a big positive as the cloud-based platform is expected to be a key driver of its growth in the future. The Altium share price is trading at $33.92 this afternoon.
BHP Group Ltd (ASX: BHP)
Analysts at Ord Minnett have retained their buy rating and $50.00 price target on this mining giant's shares. The broker has lifted its forecasts for a number of commodities notably higher, which it feels bodes well for BHP in 2021. So much so, the broker is forecasting a fully franked ~$2.39 dividend in FY 2021. Based on the current BHP share price of $42.78, this represents a 5.6% dividend yield. Combined with its price target, BHP's shares offer a potential return in excess of 22% over the next 12 months.
Challenger Ltd (ASX: CGF)
A note out of UBS reveals that its analysts have reinstated coverage on this annuities company's shares with a buy rating and improved price target of $6.85. Although the Challenger share price has recovered well after being hammered at the height of the pandemic, the broker still sees meaningful upside. It also believes the risks are now to the upside in respect to Challenger's earnings, especially given favourable regulatory developments. The Challenger share price is trading at $5.93 on Wednesday.
