Experts believe the market is set to rise further this year and leading brokers have just put forward three new ASX shares that they just upgraded to “buy” for your watchlist.
The S&P/ASX 200 Index (Index:^AXJO) gained 0.2% this morning and is up nearly 10% since January. Several equity experts believe ASX shares will continue to do well – at least for the rest of this year if not beyond.
Despite the big gains on the ASX, there are still buying opportunities on the market. One example is the IGO Ltd (ASX: IGO) share price even as it raced to a 13-year high.
ASX shares getting a big boost from broker upgrade
The lithium and nickel miner jumped 3.8% to $8.29 during lunch time trade – making it the third best performer on the ASX 200.
Investors are getting excited about the IGO share price after Goldman Sachs upgraded it to “buy”. The upgrade comes as IGO successfully completes its acquisition of a 49% stake in Tianqi Lithium Energy Australia (TLEA).
What is the IGO share price worth?
“We forecast the acquisition will be EPS accretive from FY23 and cash flow accretive from FY25, driven by a strengthening lithium price and the ramp up of production,” said Goldman.
The broker believes IGO is well placed to benefit from the expected boom in battery demand. The miner is positioned in the bottom quartile of the cost curve across nickel, spodumene, and lithium hydroxide.
The broker’s 12-month price target on the IGO share price is $9.30 a share.
Playing a better game
The group intends to split into two ASX-listed entities. One will control Lotteries and Keno (L&K), while the other will hold the wagering and media businesses.
Demerger drives “buy” upgrade for this ASX share
“We are attracted to L&K’s infrastructure-like qualities, which have clearly been illustrated through its financial performance during the pandemic,” said Morgans.
“We think the demerger has the potential to unlock the value inherent in the high quality L&K business.”
The broker’s 12-month price target for the combined group increased to $5.66 fron $5.11 a share.
Better placed for the commodity upswing
Another ASX shares that got upgraded by Morgans to “add” from “hold” is the Coronado Global Resources Inc (ASX: CRN) share price.
The broker took a more bullish view of the miner after it successfully refinanced its debt and undertook a capital raising.
The repair to its balance sheet is timely as it coincides with a sharp rise in global coking coal prices.
“Physical market participants – producers, traders, buyers – are increasingly of the view that stronger pricing will persist into end-CY21 on higher steel pricing,” added Morgans.
“Very strong Chinese demand is clearly spilling over into pricing into markets ex-China.”
The broker’s 12-month price target on the Coronado share price is $1.06 a share.