3 ASX shares rated as buys by brokers

The three ASX shares I’m going to mention in this article are rated as ‘buys’ by several brokers.

Broker recommendations give an indication where market analysts think there are buying opportunities for investors. Share prices change all the time, so sometimes a broker could think an ASX share is a buy at one price and perhaps a sell if it were significantly higher.

Investment site MarketIndex regularly collates the ratings of brokers together to assess what the broker community collectively think are opportunities. Just because several brokers think something is a buy doesn’t mean it’s guaranteed to do well, but it may reveal some insights.

With that in mind, here are three ASX shares that brokers like:

Nine Entertainment Co. Holdings Ltd (ASX: NEC)

Nine is rated as a buy by at least nine analysts.

The ASX share has a market capitalisation of $4.22 billion according to the ASX. It has media assets spanning television, video on demand, print, digital, and radio.

Nine’s assets include the 9 Television Network, video on demand platform 9Now, talkback radio stations like 2GB, major newspapers such as The Sydney Morning Herald, The Age and The Australian Financial Review, subscription video platform Stan, and majority investments in Domain Holdings Australia Ltd (ASX: DHG) and Future Women.

In its AGM update, Nine said that earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of FY21 is expected to be around 30% higher than the first half of FY20.

TV revenue has improved, 9Now revenue is expected to be up 25%, digital subscription revenue for its metro media is expected to be up 25%, Stan subscribers continue to grow and Domain is seeing a recovery of the Australian property market.

Nextdc Ltd (ASX: NXT)

Nextdc is rated as a buy by at least 12 analysts.

The ASX share has a market capitalisation of $5.84 billion. It provides data centres which are used by some of the biggest local and international organisations. It enables customers to source and connect with cloud platforms, service provides and vendors.

The Nextdc share price is down 8% since the announcement of the positive progress of the BioNTech – Pfizer vaccine.

However, the company continues to see growth. In FY20 it grew revenue by 14%, customer numbers increased by 15%, contracted utilisation rose by 33% and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 23%.

In FY21 it’s expecting to grow data centre service revenue by 21% to 25% and underlying EBITDA is expected to increase by 20% to 24%.  

Zip Co Ltd (ASX: Z1P)

Zip is rated as a buy by at least six analysts.

The ASX share has a market capitalisation of $3.09 billion according to the ASX. The buy now, pay later business operates both its own Zip business for the local market and it has other brands that it acquired for international markets, such as QuadPay.

Last month Zip reported its FY21 first quarter update.

It said that it achieved quarterly revenue of $71.7 million, which was growth of 88%. Its customer numbers increased by 114% to 4.5 million whilst the number of merchants increased by 69% to 34,400.

More customers and more merchants saw record quarterly transaction volume of $943.1 million, which was up 96%. This is now annualising at around $3.8 billion.

Zip said it’s now well on its way to becoming a true global buy now, pay later leader with operations across Australia, New Zealand, the United States, the UK and South Africa.

More reading

• ASX 200 down 0.35%: Ramsay Q1 update, NEXTDC’s international expansion, gold miners surge
• NEXTDC (ASX:NXT) share price edges higher on AGM update
• 5 things to watch on the ASX 200 on Friday
• Why InvoCare, Nine, Telstra, & Wesfarmers shares are storming higher
• Nine (ASX:NEC) share price surges after AGM update

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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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