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:
Image source: Getty Images
Electro Optic Systems Holdings Ltd (ASX: EOS)
According to a note out of Bell Potter, its analysts have retained their buy rating on this defence and space company's shares with an improved price target of $9.00. This follows news that Electro Optic Systems has signed an agreement worth US$80 million with a customer in Korea. This will see the company manufacture and sell a 100kW High Energy Laser Weapon (HELW). The broker believes that current competitive dynamics in the HELW industry are favourable for Electro Optic Systems. It notes that US companies are unable to export directed energy technology, the UK offers a lower power (30kW) weapon, and Israel's Iron Beam system lacks clarity on export restrictions. The Electro Optic Systems share price is trading at $7.54 on Wednesday.
Flight Centre Travel Group Ltd (ASX: FLT)
A note out of Morgans reveals that its analysts have retained their buy rating on this travel agent's shares with an improved price target of $18.38. Morgans was pleased with the company's decision to acquire Iglu and sees it as a strategically sound acquisition for its Leisure business unit. Especially given the cruise sector is a high growth and high margin segment within the travel industry. Morgans also feels that Flight Centre's strong balance sheet can comfortably fund this acquisition and its capital management strategy. Overall, it has upgraded its forecasts to reflect the acquisition and boosted its valuation accordingly. The Flight Centre share price is fetching $15.06 at the time of writing.
Zip Co Ltd (ASX: ZIP)
Analysts at Macquarie have retained their outperform rating and $4.85 price target on this buy now pay later provider's shares. According to the note, the broker believes that Zip will deliver on its net transaction margin guidance despite elevating loss rates caused by its accelerating total transaction value (TTV) growth. Outside this, it is forecasting Zip to continue to deliver rapid growth supported by increased product adoption, expansion of merchant network, increased customer engagement, and digital product innovation. The Zip share price is trading at $3.03 on Wednesday afternoon.
