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:
Coles Group Ltd (ASX: COL)
According to a note out of Morgans, its analysts have retained their add rating on this supermarket giant's shares with an improved price target of $18.95. The broker was pleased with Coles' third-quarter sales update, noting that it was ahead of expectations. Morgans had been forecasting supermarket comparable sales growth of 3.5% for the three months. However, Coles outperformed that with 4.2% growth. This later proved to be significantly stronger than its arch-rival, which implies market share gains. And while Morgans acknowledges that cost inflation is likely to be a headwind, it is optimistic that this will be offset by Coles' cost reduction program. In light of this, Morgans remains very positive. The Coles share price ended the week at $16.12.
ResMed Inc. (ASX: RMD)
A note out of Citi reveals that its analysts have retained their buy rating on this sleep disorder treatment company's shares with an improved price target of $38.00. This follows the release of ResMed's quarterly update. Citi was impressed with the company's performance during the three months. This was particularly the case with its gross margin, which improved far more than its analysts were expecting. But it doesn't expect the improvements to end there. The broker expects further margin improvements over the next 12 months. Another positive is that Citi suspects that rival Philips will not re-enter the market until 2026. It also believes that weight loss drugs will help grow awareness of sleep disorders, increasing its addressable market. The ResMed share price was fetching $32.91 at Friday's close.
Woolworths Group Ltd (ASX: WOW)
Analysts at Goldman Sachs 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 its third-quarter sales update last week. While Woolworths delivered sales growth well short of rival Coles during the three months, Goldman notes that it was in line with expectations. It also feels that we have now seen the worst of its market share losses and that trends will improve moving forward despite management's cautious outlook commentary. In light of this, the broker feels that the selling is overdone and that its shares are undervalued. The Woolworths share price ended the week at $30.59.
