Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

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It has been another busy week for Australia's top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here's why brokers think these ASX shares are in the buy zone:

Life360 Inc (ASX: 360)

According to a note out of Bell Potter, its analysts have retained their buy rating on this location technology company's shares with an improved price target of $16.25. Bell Potter is feeling even more bullish following the release of an unexpected market update last week which revealed that Life360 had a record first quarter. It highlights that Life360's global monthly active users and global paying circles materially exceeded both its own and the market's expectations. This has led to Bell Potter lifting its revenue and earnings forecasts through to FY 2026. Together with improving sentiment thanks to the successful tech IPO of Reddit Inc (NYSE: RDDT), the broker has lifted the valuation metrics it uses for the company. The Life360 share price closed the week at $13.55.

NextDC Ltd (ASX: NXT)

A note out of UBS reveals that its analysts have retained their buy rating and $20.10 price target on this data centre operator's shares. This follows the announcement of a major $1.3 billion capital raising. These funds are being raised to support the accelerated development and fit outs of its core Sydney and Melbourne data centre portfolio. UBS sees this capital raising as proof that demand is not only very strong for its data centres, but it is accelerating. The NextDC share price ended the week in a trading halt while it undertakes the institutional component of this capital raising. It last traded at $16.71.

Qantas Airways Limited (ASX: QAN)

Analysts at Goldman Sachs have retained their buy rating and $8.05 price target on this airline operator's shares. This follows the announcement of a major update to the company's Frequent Flyer program. This update includes the launch of Classic Plus rewards, which will provide customers with 20 million+ more reward seats for redemption by the end of 2024. Although Goldman has trimmed its earnings estimates slightly in FY 2024 to reflect the change, this is offset by increases to medium-term earnings estimates. In light of this, the broker makes no changes to its valuation and continues to believe that its shares are undervalued. The Qantas share price ended the week at $5.72.

Motley Fool contributor James Mickleboro has positions in Life360 and Nextdc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Life360. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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