It was 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:
Image source: Getty Images
DroneShield Ltd (ASX: DRO)
According to a note out of Bell Potter, its analysts have upgraded this counter drone technology company's shares to a buy rating with a reduced price target of $1.25. Bell Potter points out that DroneShield recently completed a $120 million fully underwritten placement. The proceeds will fund a significant R&D program into greater application of artificial intelligence in next-generation products. The broker thinks this will help the company maintain its market leading position. In addition, with a sales pipeline of >$1.1 billion and a contracted order backlog of $28 million, Bell Potter believes this will underpin a significantly stronger second half. So, with its shares pulling back materially in recent weeks, it thinks this provides an attractive entry point. The DroneShield share price ended the week at $1.09.
Nextdc Ltd (ASX: NXT)
A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $19.00 price target on this data centre operator's shares. The broker has been running the rule over quarterly results in the United States and assessing industry feedback. The good news for NextDC is that it believes both are supportive of its bullish view on the company. Goldman highlights that all three hyperscalers spoke of higher forward looking capex investment to support artificial intelligence and cloud products. Whereas industry feedback has proven constructive, with Australian competition not as fierce as believed and all operators reportedly doing well. As a result, the broker is confident that NextDC will deliver on its expectations when it releases its numbers later this month. The NextDC share price was fetching $15.65 at Friday's close.
Pro Medicus Limited (ASX: PME)
Another note out of Goldman Sachs reveals that its analysts have retained their buy rating and $148.00 price target on this health imaging technology company's shares. Ahead of the release of its results this month, Goldman is predicting another strong set of numbers. It is forecasting a 28% increase in revenue and a 29% jump in EBITDA for the 12 months. Goldman notes that the latter is a touch ahead of consensus estimates. But if you thought its growth would slow next year, think again. The broker is forecasting Pro Medicus' growth to accelerate in FY 2025. This is expected to be underpinned by a full period contribution of recent implementations, new contract wins, subsequent price increases, and negligible customer churn. The Pro Medicus share price ended the week at $128.09.
