Why a leading broker is bullish on these 3 ASX shares

These ASX shares could be heading higher…

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If you have room for some new portfolio additions, then it could be worth considering the three ASX shares listed below.

Here's why analysts at Morgans are bullish on these shares:

QBE Insurance Group (ASX: QBE)

Morgans is feeling positive about this insurance giant's shares. It currently has an add rating and $13.70 price target on them.

The broker believes QBE's shares are trading at an attractive level. Particularly given its balance sheet and the outlook for premium increases.

It said: "We see QBE as likely having positive underlying momentum into next year. QBE has been putting through top-line rate increases of around 9%, which should assist margin expansion into FY22. With QBE's balance sheet recently reset, pricing tailwinds evident and the stock relatively inexpensive trading on ~12.9x FY22F PE."

ResMed Inc (ASX: RMD)

Morgans is a fan of ResMed. Its analysts currently have an add rating and $40.80 price target on its shares.

The broker likes ResMed due to its very positive medium to long term outlook, which is being underpinned by its digital platform.

Morgans commented: "While we believe the next few quarters will likely be volatile, as COVID-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift, nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain."

Sonic Healthcare (ASX:SHL)

Finally, this healthcare share is another that Morgans rates highly. The broker currently has an add rating and $47.05 price target on its shares.

Morgans is positive on Sonic due largely to its belief that COVID testing will remain strong for the foreseeable future. It also notes that its strong balance sheet opens up M&A opportunities.

Its analysts explained: "We see COVID-19 testing continuing into the foreseeable future, with growth potential in COVID serology testing. SHL's global base business is increasingly resilient, benefitting from geographical diversity. Strong B/S (gearing 21.6x; A$1.3bn headroom) opening the door to acquisitions, contracts and JVs [joint ventures]."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. and Sonic Healthcare Limited. 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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