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:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of UBS, its analysts have retained their buy rating and NZ$22.00 (A$20.50) price target on this infant formula company’s shares. The broker believes that the company’s market share on Chinese ecommerce platforms has increased strongly over the last 12 months. It expects this to underpin further strong earnings growth in FY 2021. I agree with UBS on a2 Milk Company and would be a buyer of its shares.
Santos Ltd (ASX: STO)
Analysts at Morgans have retained their add rating but trimmed the price target on this energy producer’s shares slightly to $6.00. This follows the announcement of write downs relating to its GLNG operation. In addition to this it notes that Santos has reduced its oil price forecast for 2020 and 2021. Nevertheless, the broker still sees value in its shares at this level and Santos remains its top pick in the industry. While I think Morgans makes a valid point about its valuation, I would like to see oil demand strengthen before considering an investment.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $6.57 price target on this airport operator’s shares following its traffic update. The broker expects the spike in coronavirus cases to delay the recovery in the domestic travel market and has suggested a full recovery in passenger volumes could take a few years. However, it sees value in its shares and growth opportunities from developments and acquisitions. I agree with Macquarie and feel Sydney Airport shares would be a good long term option for investors.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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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