Why these 3 ASX 200 shares just gained significant broker upgrades

The brokers just boosted their outlooks for these ASX 200 shares. But why?

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Three S&P/ASX 200 Index (ASX: XJO) shares just scored significant upgrades from leading brokers.

All three operate in different market sectors.

And the brokers expect all three to post share price gains over the year ahead.

Here's why.

(Broker data courtesy of The Australian.)

Three ASX 200 shares with improved outlooks

The first ASX 200 share getting a broker upgrade is wholesale food, liquor and hardware distributor Metcash Ltd (ASX: MTS).

Metcash shares are up 0.4% in morning trade, changing hands for $3.71 apiece. That leaves the Metcash share price down 1% over 12 months. Metcash shares also trade on a fully franked trailing dividend yield of 5.9%.

Evans & Partners sees some modest gains ahead for Metcash investors. The broker raised the ASX 200 share to a neutral rating with a $3.93 price target.

This follows yesterday's release of the company's full-year results for the 12 months ending 30 April.

Highlights included a 0.7% year on year increase in revenue to $15.9 billion. But profits slipped, with underlying profit after tax down 8.2% from the prior year to $282.3 million. This saw the final Metcash dividend cut by 23% to 8.5 cents a share.

Which brings us to the second ASX 200 share getting a broker upgrade, Origin Energy Ltd (ASX: ORG).

Shares in the energy provider are up 1.0% at time of writing, trading for $10.77. That sees the Origin Energy share price up more than 27% in 12 months. Origin shares also trade on a fully franked trailing dividend yield of 4.4%.

Citi sees some significant upside from current levels. The broker rated Origin shares as a new buy with a price target of $12.00. That's more than 11% above this morning's share price.

Rounding off the list of ASX 200 shares gaining a significant broker upgrade is engineering and mining services company Monadelphous Group Ltd (ASX: MND).

Monadelphous shares are up 0.7% in morning trade today, changing hands for $13.41 apiece. That sees the Monadelphous share price up 17% in 12 months. The stock also trades on a fully franked trailing dividend yield of 3.8%.

Argonaut Securities forecasts more gains ahead for the company. The broker raised Monadelphous to a buy rating with a $14.45 price target. That represents a potential upside of almost 8% from current levels.

As always, before investing your hard-earned money into any ASX 200 shares or smaller stocks, be sure to do your own research first. Or simply reach out for some expert advice.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben 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 Metcash. 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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