The latest ASX shares upgraded by brokers to “buy” during the reporting season

The market hit a fresh one-year high during the profit reporting season, but the strong rise didn’t deter brokers from upgrading these ASX shares to “buy” today.

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The market hit a fresh one-year high during the profit reporting season, but the strong rise didn’t deter brokers from upgrading these ASX shares to “buy” today.

The S&P/ASX 200 Index (Index:^AXJO) rose 0.5% ahead of the market close to 6,907 – its highest level since February 2020.

Positive results from the unfolding reporting season are fuelling the bullish sentiment, but this isn’t the only reason the Inghams Group Ltd (ASX: ING) share price is jumping.

Winner winner chicken dinner

The Inghams share price added 3.2% to $3.60 at the time of writing after Macquarie Group Ltd (ASX: MQG) upgraded it to “outperform” from “neutral”.

Weak prices haven’t made as big a dent on the poultry supplier’s bottom line as this has been offset by a bounce in volume.

Sales recovery prompts share upgrade

“Industry feedback suggests that orders have improved post the initial COVID-19 shock,” said the broker.

“Volumes have been strong in the Dec half (continuation of Sep Qtr) and pricing has been fairly stable. Feed costs are also coming down given the strong 2020/21 winter crop but won’t flow through to ING until 4Q21.”

Strong sales figures posted by Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) are also a positive sign for Inghams.

Macquarie’s 12-month price target on the Inghams share price is $3.78 a share.

Bad news is in the price

Meanwhile, the underperforming Altium Limited (ASX: ALU) share price is a buying opportunity, according to UBS.

The printed circuit board design software developer recently posted a disappointing half year result but that didn’t stop UBS from lifting its rating to “buy” from “neutral”.

Altium’s earnings missed consensus forecast and management warned that full year revenue and earnings will come in at the lower end of its guidance.

Upgraded to “buy” for longer-term opportunity

“We sit at the bottom end of both revenue and EBITDA guidance but believe the market reaction today suggests many see considerable risk to achieving this 2H skew,” said UBS. “We admit some risk but also see 2H tailwinds.”

These tailwinds include pent-up demand for its offerings as business confidence rebounds from the COVID-19 impact, a return to normal pricing levels and positive currency tailwinds.

“Our industry feedback continues to be supportive of ALU’s product leadership and upside from its long-term aspirations,” added the broker.

“We believe ALU’s strong balance sheet position may allow it to capitalise on M&A opportunities medium-term.”

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Brendon Lau owns shares of Macquarie Group Limited and Woolworths Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Altium, COLESGROUP DEF SET, and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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