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:
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Coles Group Ltd (ASX: COL)
According to a note out of Bell Potter, its analysts have retained their buy rating on this supermarket giant's shares with a trimmed price target of $20.50. Bell Potter notes that Coles released its first quarter update last week and delivered a result that was modestly below its forecasts. Nevertheless, it was pleased to see that the supermarket operator outperformed the industry during the three months, implying further market share gains over the three months. Outside this, Bell Potter continues to see Coles as providing an attractive earnings growth profile through to at least FY 2027 on an underlying basis. It expects this to be driven by $1 billion in cumulative savings through Simplify & Save, the sustained benefit of lower loss rates, store network expansion, and its sizeable investment in automated distribution centres. The Coles share price ended the week at $17.61.
DroneShield Ltd (ASX: DRO)
Another note out of Bell Potter reveals that its analysts have upgraded this counterdrone technology company's shares to a buy rating with a reduced price target of $1.20. The broker made the move following the release of its third quarter update. However, it is worth noting that Bell Potter was disappointed with its performance for the first three quarters of 2024. This has led to the broker cutting its earnings estimates materially. However, it appears to believe that recent share price weakness has gone too far and created an attractive entry point for investors. Especially considering DroneShield's strong runway into 2025, which includes $18 million of contracted revenue. The DroneShield share price was fetching 95 cents at Friday's close.
ResMed Inc. (ASX: RMD)
Analysts at Macquarie have retained their outperform rating on this sleep disorder treatment company's shares with an improved price target of $41.10. According to the note, the broker was pleased with ResMed's strong first quarter update last month. Macquarie notes that ResMed delivered a quarterly profit comfortably ahead of its expectations. This was thanks to a better than expected performance from the rest of the world segment. The broker was also pleased with the company's operating leverage and free cash flow generation during the three months. In response to the update, Macquarie has lifted its earnings estimates and valuation accordingly. The ResMed share price ended the week at $37.00.
