It has been another busy week for many of 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 right now:
Capricorn Metals Ltd (ASX: CMM)
According to a note out of Goldman Sachs, its analysts have upgraded this gold miner's shares to a buy rating with a $9.90 price target. The broker is feeling positive about gold and feels that Australian gold miners can continue to outperform in the near term. Outside this, it likes Capricorn Metals due to its increasingly compelling growth projects at Karlawinda (expansion) and Mt. Gibson (one of few greenfield projects in the sector). It also highlights that there is emerging underground optionality, which is not in its base case estimates, and a strong funding position to execute on this. The Capricorn Metals share price is trading at $8.42 today.
Nextdc Ltd (ASX: NXT)
A note out of Citi reveals that its analysts have retained their buy rating and $18.70 price target on this data centre operator's shares. The broker points out that there is speculation that Microsoft (NASDAQ: MSFT) has cancelled two contracts in Sydney with NextDC. However, it believes these were options relating to OpenAI. While still a negative, all is not lost. Particularly given how there are others that might require capacity for partnerships with OpenAI in Australia. In addition, the broker sees scope for Microsoft to take further capacity at NextDC's Melbourne sites. In light of this, Citi appears to believe that recent weakness has created a compelling buying opportunity for investors. The NextDC share price is fetching $10.47 at the time of writing.
Sonic Healthcare Ltd (ASX: SHL)
Another note out of Goldman Sachs reveals that its analysts have initiated coverage on this healthcare company's shares with a buy rating and $32.20 price target. According to the note, the broker believes that funding reforms in Germany are likely to be a headwind to growth. However, they are unlikely to come as a surprise to investors given the industry's track record of withstanding cuts to reimbursement. The good news, though, is that Goldman feels that the cost reduction initiatives in the US and synergies from the Medisyn & Dr Risch Group (Swiss acquisitions) will help offset this and deliver earnings ahead of consensus estimates in the near term. The Sonic share price is trading at $26.60 on Friday.
