It has been another busy week for Australia's top brokers. This has led to the release of a large 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:
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BHP Group Ltd (ASX: BHP)
According to a note out of Macquarie, its analysts have retained their outperform rating and $56.00 price target on this mining giant's shares. While investors have been focusing a lot on the falling iron ore price, Macquarie highlights that strong coal prices are supporting its earnings and cash flow. In respect to the latter, the broker estimates that its shares are trading on a free cash flow yield of ~20%. This should be supportive of generous dividends. The BHP share price is trading at $37.83 today.
Pilbara Minerals Ltd (ASX: PLS)
Another note out of Macquarie reveals that its analysts have retained their outperform rating and $2.80 price target on this lithium miner's shares. This follows news that Pilbara Minerals has begun the commissioning of the Ngungaju Plant acquired from Altura Mining. It has been in care and maintenance mode since its acquisition. Macquarie notes that this comes at a time when spot lithium prices in China remain strong and could support better than forecast earnings. The Pilbara Minerals share price is fetching $1.96 today.
Sonic Healthcare Limited (ASX: SHL)
Analysts at Morgan Stanley have retained their overweight rating and $45.50 price target on this healthcare company's shares. According to the note, the broker has been looking at an update from its European peer, Synlab. It notes that Synlab has upgraded its guidance to reflect stronger than expected COVID-19 testing demand. Morgan Stanley feels this bodes well for Sonic and creates upside risk to its earnings estimates for FY 2022. The Sonic share price is trading at $39.85 today.
