It was another busy week for Australia's top brokers, with a number of new research notes being released.
Three broker buy ratings that you might want to know more about are summarised below. Here's why brokers think these ASX shares could be worth buying:
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Fortescue Ltd (ASX: FMG)
According to a note out of Macquarie, its analysts have retained their outperform rating on this iron ore giant's shares with a reduced price target of $18.00. This follows Fortescue's first-quarter update, which revealed mining volumes of 62.7 million tonnes, beating expectations by 7%. Operating costs were also slightly better than anticipated. However, Macquarie highlights ongoing negotiations with China's state-backed iron ore buyer, China Mineral Resources Group, as a major concern. The dispute has resulted in Fortescue building up unsold inventory, with production potentially at risk if an agreement isn't reached by the end of the year. Despite this uncertainty, the broker expects a negotiated settlement and believes production cuts are less likely than commercial concessions. Although it has reduced its earnings forecasts, the broker continues to see value in Fortescue's shares. The Fortescue share price was fetching $14.27 at Friday's close.
NextDC Ltd (ASX: NXT)
A note out of Morgans reveals that its analysts have upgraded this data centre operator's shares to a buy rating with a $7.50 price target. The upgrade comes despite NextDC recently cutting its FY 2027 underlying EBITDA guidance by approximately 36%. This was driven by delays in securing additional electricity supply for its M3 Melbourne data centre, which is now expected to arrive in FY 2028. While this is disappointing, Morgans believes the sharp decline in NextDC's share price has created a buying opportunity. It highlights that the company's shares are trading well below its estimated net tangible asset value. The broker also notes management's reassurance that the company remains compliant with its debt covenants. Although Morgans acknowledges that NextDC still needs to address investor concerns, it believes the current discount is excessive if the delays prove temporary. The NextDC share price ended the week at $5.61.
Xero Ltd (ASX: XRO)
Analysts at UBS have retained their buy rating on this cloud accounting software provider's shares with a reduced price target of $106.00. According to the note, Xero shares have fallen around 25% over the past two months and 40% since the beginning of 2026. This is partly due to concerns about the potential impact of artificial intelligence on software companies. However, UBS believes investors have become too pessimistic about Xero's outlook. The broker estimates that the current share price is factoring in annual revenue growth of just 7% over the next four years, with no growth in average revenue per user from FY 2027. UBS considers these expectations overly cautious, particularly following recent industry checks that reinforced its confidence in Xero's competitive position. It believes continued growth in the company's core accounting software business could be enough to drive a meaningful recovery in its shares, even without a major contribution from AI. The Xero share price ended the week at $64.19.
