Brokers name 3 ASX shares to buy now

Brokers have named Zip Co Ltd (ASX:Z1P) and these ASX shares as buys this week. Here’s why they are bullish on them…

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Australia’s top brokers have been busy adjusting their estimates and recommendations once again. This has led to the release of a number of broker notes.

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:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating and $30.90 price target on this artificial intelligence (AI) services company’s shares. The broker notes that one of its rivals, Scale AI, has recently raised US$325 million in fresh funding. This doubles its valuation to US$7 billion in a matter of months. Citi believes this is a positive read through for Appen in relation to the outlook for the AI training data market. Though, it acknowledges that the company may have to increase its investment to stay ahead of the competition. The Appen share price is currently fetching $17.17.

Qantas Airways Limited (ASX: QAN)

A note out of Macquarie reveals that its analysts have retained their outperform rating and lifted their price target on this airline operator’s shares to $6.45. This follows an update out of Qantas this week revealing that it is expecting its domestic capacity to increase beyond pre-COVID levels in FY 2022. Overall, Macquarie believes that structural business improvements made during the pandemic will eventually lead to higher profitability. The Qantas share price is trading at $5.15 on Friday morning.

Zip Co Ltd (ASX: Z1P)

Analysts at Morgans have retained their add rating but trimmed their price target on this buy now pay later (BNPL) provider’s shares to $10.39. This follows the completion of its $400 million convertible notes offering. According to the note, the broker believes this leaves Zip with $500 million of cash to support its growth plans. It feels this is enough to fund the company’s operations for some time to come, ruling out any further capital raisings in the near term. The Zip share price is currently fetching $9.19.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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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