The anticipated recovery in the real economy, vaccine rollout, and rising interest rates have seen a rapid rotation to cyclical sectors while beating up tech and growth-related ASX shares.
Here are 4 ASX shares that have been upgraded to a buy or equivalent rating on Wednesday.
1. Carsales.com Ltd (ASX: CAR)
The Carsales share price has been far from inspiring this year but likely caught up in the recent tech-driven selloff. Morgan Stanley thinks that new car sales volumes have turned positive in 2021, which should lift the company's revenue and bottom line. The broker rates the company as 'overweight' with a $23.00 share price target. This represents a 25% upside to its price at the time of writing.
2. Nine Entertainment Co Holdings Ltd (ASX: NEC)
The Nine share price has soared into record all-time highs thanks to its digital transformation and continued strength in traditional lines of businesses such as free-to-air television, publishing, and radio.
Morgan Stanley believes that there could be a cyclical rebound in the television advertising market, which could signal continued growth for Nine. The broker rates the company as overweight with a $3.42 target price. This represents a 13% upside to its current share price.
3. Qantas Airways Limited (ASX: QAN)
UBS is eyeing Qantas' $1 billion cost reduction program and an improvement in domestic consumption as part of the company's road to recovery in 2021. The broker thinks both of these factors are taking place, which could result in an operating leverage surprise. UBS rates the Qantas share price as a buy with a $6.20 price target. The current Qantas share price is sitting at $5.19.
4. Tyro Payments Ltd (ASX: TYR)
The Tyro share price is in recovery mode after its terminal debacle earlier this year. Morgan Stanley has been paying attention to the volume of downloads for the company's mobile app, which is recovering to levels before the terminal outage. The broker thinks that weekly app downloads are a useful indicator about Tyro's merchant acquisitions, market share and penetration rate.
The broker sees the recovery as a positive, rating the company as overweight with a $4.10 target price. Tyro shares are currently swapping hands for $3.23 apiece.
