Brokers raise ratings on these 2 ASX shares this afternoon

Here are 2 ASX shares that received an upgrade from brokers this afternoon. We take a look at why and what's been driving the prices.

Mitchell Lawler

Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.

Published March 9, 2021 4:00 pm AEDT

In a whirlwind of a day for the S&P/ASX 200 Index (ASX: XJO), shares are being divided. Financials and traditional value shares are pushing higher, while tech is slaughtered.

However, in the mess of it all, 2 ASX shares have been upgraded by leading brokers.

2 ASX shares getting upgraded

ALS Ltd (ASX: ALQ)

ALS Ltd is an ASX share that has performed solidly over the year, adding nearly 34% over the period. However, the global testing, inspection, and certification company has been caught up in the selloff since mid-February. As a result, the share price is nearly 20% off its February high, trading at $9.54 today.

Investors were buying up the share yesterday, following the announcement of the company acquiring Investiga. The purchase adds Investiga's pharmaceutical testing operations in Brazil and the east coast of the US to ALS.

This afternoon JP Morgan lifted its coverage on the ASX share to a 'neutral' rating. The broker noted the increase in geochemistry sampling activity and the acquisition as positives for the business. Subsequently, the price target was set at $9.80 a share for March 2022.

At the time of writing, ALS is trading down 0.9% to $9.46. The company's market capitalisation is now $4.61 billion.

Infomedia Ltd (ASX: IFM)

The Infomedia share price has been left battered and bruised in the recent ASX tech share thrashing. Prior to the February sell-off, the part cataloging software provider's share price had been hovering around $1.85. At that price, the share had only shaved off 7% since last year. However, the tech armageddon has left Infomedia's share price down 32% at $1.34.

It certainly didn't help when the company reported flat earnings growth in late February. Management put the poor result down to timing delays in negotiations and installations. Additionally, the reluctance to provide future guidance further rattled investors.

However, this hasn't stopped Bell Potter from raising its rating to a 'buy' on Infomedia. The broker is expecting double-digit earnings growth in both 2021 to 2022 and 2022 to 2023 for this ASX-listed share. Bell Potter believes the share is undervalued at $1.35, compared to its price target of $1.75, implying nearly 30% of upside on the current trading price.

At the time of writing, the Infomedia share price is flat at $1.33. The company's market capitalisation is now $499 million.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.