Big brokers have run the ruler on ASX shares that could beat the market. Here are the ones that have been rated as a buy or buy equivalent on Tuesday.
ASX shares that could outperform the market
3P Learning Ltd (ASX: 3PL)
3P Learning announced on Monday that it will acquire 100% of Blake eLearning to emerge as a leading educational technology platform.
Morgan Stanley views this as a positive transaction in terms of scale, product mix, customer mix and potential for meaningful revenue and cost synergies.
The broker's commentary does note some slight caution towards Blake eLearning, which seems to be cycling a period of accelerated COVID-19 sign-up. This could result in a higher churn rate and flatter growth in the near term.
Morgan Stanley maintained its overweight rating and increased its target price from $1.50 to $1.60. 3P Learning shares are currently trading at $1.30.
Aristocrat Leisure Ltd (ASX: ALL)
Aristocrat Leisure has arguably received the most broker updates of all ASX shares this month. This includes updates from April 7, April 9 and April 13. The big broker narrative typically highlights a bounce back in its core casino machines business and acceleration in its digital gaming revenues.
On Tuesday, Credit Suisse points out that Apple Inc (NASDAQ: AAPL) was named the defendant in six lawsuits filed in United States federal courts alleging casino-style app games that allow users to purchase virtual coins, and pay money to win more playing time, constitutes unlawful gambling in certain US states.
The broker believes that Apple may have to restrict or alter its distribution of mobile gambling games.
Overall, Credit Suisse remains bullish on Aristocrat shares, retaining an outperform rating and $38.00 target price. The Aristocrat share price is currently fetching $36.14, within arm's reach of its all-time record high of $38.00.
BlueScope Steel Limited (ASX: BSL)
Macquarie upgraded its earnings estimates in the second half to $919.4 million. The broker believes a rally in steel prices have been underpinned by favourable market dynamics including a consolidating global steel industry, high utilisation and strong demand.
Macquarie's commentary notes that there are risks associated with a potential rollover of steel prices, but believes strong earnings momentum can continue in the near term.
An outperform rating was retained and target price raised from $21.65 to $23.50. BlueScope shares are currently trading at $20.30.
Mach7 Technologies Ltd (ASX: M7T)
The Mach7 share price jumped as much as 14% yesterday after the company announced record quarterly results. After assessing the third-quarter results, Morgan Stanley was pleased with its $12.8 million in new sales orders for the quarter from both new and existing customers. This represents a significant uplift from the $7.6 million in the second quarter.
The broker made no changes to its forecasts, retaining an add rating with a $1.68 target price. Mach7 shares have retreated 2.55% on Tuesday to $1.34.
Mineral Resources Limited (ASX: MIN)
Macquarie upgraded a number of ASX lithium shares on Tuesday including heavyweights Galaxy Resources Limited (ASX: GXY), Orocobre Ltd (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS).
The broker lifted its lithium price outlook and expects Mineral Resources' to begin producing lithium hydroxide in FY22. Macquarie believes that buoyant iron ore prices will support Mineral Resources in the near term while its entry into lithium production will drive medium to long term value.
Macquarie rates Mineral Resources as outperform and lifted its target price from $50 to $61. Mineral Resources shares are currently trading at $40.85.
