Many of Australia's top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.
Three ASX shares that brokers have named as buys this week are listed below. Here's why their analysts are feeling bullish on them right now:
Alpha HPA Ltd (ASX: A4N)
According to a note out of Bell Potter, its analysts have reaffirmed their speculative buy rating and $2.00 price target on this ultra-high purity aluminium products company's shares. This follows news that the company has secured $400 million in debt funding from lenders the Northern Australia Infrastructure Facility and Export Finance Australia. This will support the development of the HPA First Stage 2 Project which will produce ultra-high purity aluminium compounds for applications in high-technology growth sectors. This includes the manufacturing of lithium-ion batteries, LED displays/lighting, and semiconductors. The Alpha HPA share price is trading at 87.5 cents.
Karoon Energy Ltd (ASX: KAR)
A note out of Macquarie reveals that its analysts have retained their outperform rating on this energy company's shares with a trimmed price target of $2.00. This follows news that Karoon Energy has downgraded its full year production guidance after two of sixteen chains securing its floating production storage and offloading failed. This led to management being forced to shut down production from the Baúna Project and downgrade its guidance from 7.5 million barrels to 7.7 million barrels of oil to 7.2 million barrels to 7.4 million barrels. While Macquarie was disappointed with the news and has cut its earnings estimates to reflect this, it remains positive on the future and sees plenty of value in its shares at current levels. The Karoon Energy share price is fetching $1.19 this morning.
Pro Medicus Limited (ASX: PME)
Analysts at Morgan Stanley have initiated coverage on this health imaging technology company's shares with an overweight rating and $300.00 price target. According to the note, the broker believes that Pro Medicus has similar qualities to logistics software developer WiseTech Global Ltd (ASX: WTC). It highlights that Pro Medicus' solutions, like those at WiseTech, are very scalable and have relatively low penetration of global markets and very small customer churn rates. Another positive is the broker's belief that Pro Medicus will grow its customer volumes quicker than the industry over the next five years. It is expecting customer volume growth of roughly 7% per annum, whereas it expects the industry to grow at a much lower rate of 2.3% per annum. In light of this, the broker appears to believe that Pro Medicus is destined to continue its strong profit growth and deserves to trade at a premium to peers. The Pro Medicus share price is trading at $261.35 today.
