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:
Aristocrat Leisure Limited (ASX: ALL)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $38.00 price target on this gaming technology company’s shares. The broker notes that management spoke positively during its investor briefing. This has given it even more confidence that the company will emerge from the pandemic in a stronger position. It also notes changing behaviours from operators in relation to leasing equipment over buying it. Morgan Stanley believes Aristocrat is well-placed to benefit from this trend. It also sees opportunities for it to accelerate its growth inorganically thanks to its strong balance sheet. The Aristocrat Leisure share price is fetching $34.82 today.
Santos Ltd (ASX: STO)
Analysts at UBS have retained their buy rating and lifted their price target on this energy producer’s shares to $8.35. This follows the company’s decision to push ahead with its US$3.6 billion Barossa project offshore in the Northern Territory. Outside this, UBS continues to believe that Santos is the best option in the energy sector. Particularly given its valuation and near term growth catalysts. The Santos share price is trading at $7.22 this afternoon.
Sonic Healthcare Limited (ASX: SHL)
Another note out of Morgan Stanley reveals that its analysts have retained their overweight rating and lifted their price target on this healthcare company’s shares to $39.80. According to the note, the broker has lifted its earnings estimates to reflect ongoing COVID-19 testing demand. In addition to this, it believes the market is overlooking the strength of its balance sheet and feels its valuation is attractive in comparison to many of its peers. The Sonic share price is trading at $35.87 on Wednesday.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.