Big brokers have run the ruler over 3 ASX shares that could provide investors with upside in the short to medium term.
ASX shares rated a buy on Friday
EML Payments Ltd (ASX: EML)
The EML share price surged into record territory on Wednesday after announcing the acquisition of Sentenial Limited. The acquisition also includes its subsidiary, Nuapay, one of few open banking products in the marketplace.
UBS is one of the latest brokers to upgrade its view of the EML share price. The broker believes that Nuapay is well placed for the land grab opportunity within the processing component of open banking in Europe, with the potential to expand into the United States and Australia over the medium term.
A key challenge for the EML share price over the last 12 months has been its gift card business which was impacted by COVID-driven shopping centre closures and lockdown measures. UBS notes the acquisition represents another move away from its gift card earnings.
The broker retained a buy rating and raised its target price from $5.70 to $6.20. EML shares have run more than 15% this month and are currently fetching $5.75 at the time of writing.
Nufarm Ltd (ASX: NUF)
The crop protection and specialist seeds company has been a solid performer this year, climbing more than 25%. Macquarie has rated Nufarm shares as outperform with the expectation that its first-half results will show an improvement in Australia and Europe.
The broker wants to see how an improvement in the business environment will impact the bottom line. Macquarie expects that Australia and Europe to make a meaningful contribution to earnings growth in FY21.
Nufarm shares were rated as an outperform with an increase in target price from $5.50 to $5.70. Nufarm shares are trading at $5.31 at the time of writing.
Tyro Payments Ltd (ASX: TYR)
The Tyro share price has come a long way since its terminal outage and short-seller attack in February 2021. Its shares are almost 10% higher year-to-date, climbing almost 60% from its February lows.
Morgans initiated coverage of Tyro shares on Friday, with an add rating and a $4.25 target price. The broker highlights the total transaction value acquired (TVA) in Australia of $660 billion as at FY20, with $171 billion in Tyro’s core verticals of health, hospitality and retail.
Morgans is bullish on the company’s ability to grow its TVA market share from 1.4% to 3.5% between FY15 and 1H21 while consistently improving its operating leverage over time. Tyro shares are currently trading at $3.67.
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Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tyro Payments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends EML Payments. The Motley Fool Australia owns shares of and has recommended EML Payments. 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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