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:
Collins Foods Ltd (ASX: CKF)
According to a note out of Morgans, its analysts have retained their buy rating on this KFC restaurant operator's shares with an increased price target of $12.20. The broker was pleased with the company's trading update at its annual general meeting last week. It notes that the update was stronger than expected, with improving sales growth seen across all regions. And while management has only reiterated its FY 2026 guidance for low to mid-teens underlying net profit after tax growth, Morgans believes that its trading update confirms that this guidance is likely to prove conservative. Particularly given that its improving sales growth is being delivered through product innovation and strong execution. In addition, with a domestic consumer recovery still largely yet to play out, Morgans sees further upside from here. The Collins Foods share price ended the week at $10.38.
Mesoblast Ltd (ASX: MSB)
A note out of Bell Potter reveals that its analysts have retained their speculative buy rating and $3.50 price target on this biotechnology company's shares. The broker highlights that Mesoblast recently released an FY 2025 result that was largely in line with expectations. Outside this, Bell Potter notes that a major debt re-finance will be due in the coming months. Pleasingly, it expects there to be multiple options available at far better commercial terms relative to the current extortionate rates it is paying from its pre revenue days. As a result, the broker does not expect a further equity raise and believes that recent share price weakness is a buying opportunity for investors. The Mesoblast share price was fetching $2.12 at Friday's close.
Xero Ltd (ASX: XRO)
Analysts at Ord Minnett have upgraded this cloud accounting platform provider's shares to a buy rating with a $200.00 price target. According to the note, the broker was pleased with Xero's annual conference in Australia. It highlights that the conference demonstrated how Xero could materially lift its average revenue per user (ARPU) metric over time. It also points out that future upside for the Syft Analytics product is expected to come from AI integration to drive business analytics. And while its Just Ask Xero AI offering currently has no monetisation model, Ord Minnett expects it to support ARPU growth via plan bundling. In light of this, the broker believes that Xero is well-placed to achieve its medium-term revenue target. The Xero share price ended the week at $158.89.
