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:
Bapcor Ltd (ASX: BAP)
According to a note out of Morgans, its analysts have retained their add rating on this auto parts company's shares with a reduced price target of $4.95. The broker was disappointed with Bapcor's trading update, noting that its earnings will now be well short of expectations in FY 2024. In addition, Morgans notes that its CEO-elect has decided not to join the company just a day before he was due to commence in the role. While both are not great looks and Morgans has downgraded its near-term earnings estimates accordingly, it remains positive on the longer term. It also feels confident that its balance sheet will hold up during this downturn and that a capital raising will not be necessary. The Bapcor share price is trading at $4.40 on Friday.
Woolworths Group Ltd (ASX: WOW)
A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating on this supermarket giant's shares with a trimmed price target of $39.40. This follows the release of a sales update which disappointed the market. As its sales were in line with expectations, Goldman believes this disappointment stems from management's cautious outlook commentary and concerns over market share losses. However, the broker feels the selling is overdone and that its shares are undervalued now. Particularly given its confidence that the third quarter will be the worst of its market share losses. The Woolworths share price is fetching $30.83 this afternoon.
Xero Ltd (ASX: XRO)
Analysts at Goldman Sachs have also retained their conviction buy rating on this cloud accounting platform provider's shares with an improved price target of $156.00. This follows news that Xero is making changes to its Australian plans. Goldman notes that this includes price increases and streamlining the product ladder with less plans and greater segmentation between plans. The broker believes this is a clear positive for Xero and consistent with the strategy outlined at the 3×3 Investor Day. And while Goldman suspects that there could be some customer churn from the price increases, it has still lifted its revenue and earnings estimates for FY 2025 and FY 2026. The Xero share price is trading at $125.96 on Friday.
