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:
ARB Corporation Ltd (ASX: ARB)
According to a note out of Citi, its analysts upgraded this 4×4 automotive parts company's shares to a buy rating with a trimmed price target of $38.70. Citi upgraded ARB's shares largely on valuation grounds following a sharp decline in its share price since the start of the year. The broker also feels that the market is being too negative on the company's outlook. It believes that falling interest rates should be supportive of new vehicle sales and ultimately sales of its products. In addition, the launch of parts for the popular BYD Shark is expected to give its sales a lift later this year. The ARB share price was trading at $34.37 on Friday.
Cedar Woods Properties Ltd (ASX: CWP)
A note out of Bell Potter reveals that its analysts retained their buy rating on this property developer's shares with an improved price target of $8.00. The broker points out that Cedar Woods has a de-risked earnings profile with good visibility. In fact, it is forecasting a three-year earnings per share compound annual growth rate of 10.8%. This is being underpinned by record presales. Bell Potter also highlights that the strong macro environment and quality of its portfolio means that there is risk to the upside over the medium term. In light of this, it thinks the market is applying a conservative multiple to its shares and that a re-rating could be on the cards. The Cedar Woods share price was fetching $7.32 at Friday's close.
Pilbara Minerals Ltd (ASX: PLS)
Analysts at Macquarie retained their outperform rating on this lithium miner's shares with a reduced price target of $1.50. According to the note, Macquarie acknowledges that lithium prices have been moving notably lower this year amid increasing mine supply and building inventories. And while Macquarie's commodity strategy team's analysis suggests that prices are now around the 50th percentile of the cost curve, it points out that there has yet to be any meaningful production cuts. It feels this is being caused by the expectation of very strong demand growth catching up. As a result, Macquarie thinks a recovery in the lithium price is still some time away. However, given its low costs and cheap valuation, the broker sees value in Pilbara Minerals' shares at current levels. The Pilbara Minerals share price ended the week at $1.52.
