There are some ASX shares that are liked by some brokers and are currently rated as buys.
The below two businesses are not only rated as buys, but brokers think they could produce quite a good return over the next 12 months with their price targets.
Here are two to consider:
Seven West Media Ltd (ASX: SWM)
Seven West is described as one of Australia’s leading media companies with a strong presence in broadcast television, magazine and newspaper publishing and online.
There’s a lot of content that Seven West broadcasts including My Kitchen Rules, House Rules, Home and Away, Sunrise, the Australian Football League, Cricket Australia, the Olympic Games and Better Homes and Gardens.
UBS is one of the brokers that currently rates Seven West as a buy with a price target of $0.60. That means the potential upside over the next 12 months is more than 40%.
The broker likes the trajectory that TV advertising is going and is expecting growth during FY21.
The FY21 half-year result saw underlying earnings before interest and tax (EBIT) rose 29% year on year to $152 million. Part of that performance was from operating expenses declining 18% to $480 million. It also reduced net debt by 42% to $329 million – a decrease of $241 million.
Seven West revealed that the metropolitan free-to-air TV advertising market increased 0.6% during the half with a strong recovery in the December quarter (up 17%). The area of particular growth was digital revenue which increased 73% year on year, driven by broadcaster video on demand (BVOD) market growth of 44% and eight percentage points in share gains during the half.
Karoon Energy Ltd (ASX: KAR)
Karoon Energy is an oil and gas business on the ASX. It currently has a market capitalisation of around $667 million according to the ASX.
The ASX share is currently rated as a buy by Morgan Stanley with a price target of $1.80. That suggests a potential upside of around 47.50% over the next 12 months.
The broker pointed to higher production in the Bauna oil field in Brazil as a reason to be positive, as well as its tax losses.
In the quarterly update for the three months to March 2021, Karoon said oil production from the Bauna Field totalled 1.14 million barrels from oil equivalent (mmBOE), produced at an average rate of 12,641 barrels of oil per day.
Total oil sales receipts for the quarter (which included proceeds from the December cargo) were $97.2 million, representing the company’s first cash flow from oil sales.
In April 2021, the Maersk Developer rig was contracted for the Bauna workover campaign, with the option to extend the contract for the potential development of the Patola Field and drilling of a control well on the Neon light oil discovery.
Management said this is an exciting time for Karoon as it becomes an established upstream producer, with material production and near-term growth opportunities.