Two ASX shares that have been sold-off recently may have caught a break as brokers just upgraded them to 'buy'.
The upgrade comes the S&P/ASX 200 Index (ASX: XJO) jumped more than 1% as it bounced from a four-month low.
One of these upgraders is the Uniti Group Ltd (ASX: UWL) share price, which tumbled 10% over the past two weeks.
ASX shares with 'buy' upgrade catalysts
The sell-off comes after one of its directors, Vaughan Bowen, was charged with insider trading. He denies the charges.
Regardless of the outcome, Bell Potter does not see this as having a material impact on Uniti.
"In our view the potential positive catalysts for Uniti over the next several months far outweigh the potential negatives from the charging of Vaughan Bowen," said the broker.
"The potential catalysts include a strong trading update at the AGM in November, an announcement on capital management, a strong 1HFY22 result in February and perhaps even a takeover offer (given we believe Uniti is a target)."
Uniti share price could get an extra boost
Bell Potter upgraded the Uniti share price to 'buy' from 'hold'. It also reiterated its 12-month price target of $4.50 a share.
Importantly, the broker's upside prediction does not include any capital management initiatives or dividends. This is despite management signalling that this is under consideration.
ASX shares upgraded to buy after big fall
Another ASX shares to get upgraded is the Codan Limited (ASX: CDA) share price. The communications and mining equipment supplier has shed more than 30% of its value since its full-year result.
The de-rating in the Codan share price comes even as the company delivered earnings that were 3% ahead of consensus.
Investors may have dumped the shares on its conservative FY22 outlook and news that its well-regarded CEO Donald McGurks is retiring, noted Moelis Australia.
Outlook could surprise on upside
"In our view, management's commentary at the August '21 result suggested a broadly flat organic growth outlook for FY22 (which we believe the market is now pricing in)," said the broker.
"However, we note that CDA has a 5-year track record of overachieving conservative outlooks.
"We estimate at least $5m of organic EBITDA growth is achievable in FY22e largely based on incremental sales from the new GPX6000 gold detector."
With the Codan share price trading at around a FY22 price-earnings (P/E) multiple of 19 times, compared with 27 times before the results, Moelis believes now is the time to buy Codan shares.
As such, Moelis upgraded the Codan share price to 'buy' from 'hold'. Its 12-month price target is $17.12 a share.
