Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.
Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX 200 shares are in the buy zone:
Altium Limited (ASX: ALU)
According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $40.00 price target on this electronic design software company’s shares following its FY 2020 sales update. Altium’s sales result came in ahead of the broker’s expectations, though well short of its original target of US$200 million. This was driven by stronger than expected subscription growth during the pandemic. And while Morgan Stanley suspects that the market is being too optimistic on its margin expectations this year, it remains positive on its long term outlook and maintains its overweight rating. I agree with Morgan Stanley and would be a buyer of Altium’s shares.
TPG Telecom Ltd (ASX: TPG)
Another note out of Morgan Stanley reveals that its analysts have upgraded this telecommunications company’s shares to an overweight rating with an improved price target of $10.00. The broker believes the company is well-placed to take on its larger rivals following its merger with Vodafone Australia. It also likes the new TPG Telecom due to its robust balance sheet and stronger product offering. While not my favourite option in the space, I do think TPG Telecom is worth considering following its merger.
Transurban Group (ASX: TCL)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating but trimmed the price target on this toll road operator’s shares slightly to $15.19. While the broker acknowledges that the second wave in Victoria will impact Transurban’s recovery, it doesn’t impact its positive long term view of the company. It sees plenty of growth opportunities ahead that it expects to great long term value for investors. I think Macquarie is spot on and Transurban would be a top buy and hold option.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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