Top brokers name 3 ASX shares to buy next week

Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Allkem Ltd (ASX: AKE)

According to a note out of Macquarie, its analysts have retained their outperform rating and $21.00 price target on this lithium miner’s shares. This followed the release of a full year result that was materially ahead of the broker’s expectations. In addition, Macquarie highlights that management is guiding to even stronger than expected lithium prices from Olaroz for the first half of FY 2023. The only disappointment was a reduction to its Mt Cattlin production guidance, which has led to a slight revision to Macquarie’s earnings estimates. The Allkem share price ended the week at $13.91.

Costa Group Holdings Ltd (ASX: CGC)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $3.60 price target on this horticulture company’s shares. Goldman was pleased with Costa’s first half performance, noting its solid cost absorption relative to peers in the agriculture sector. In addition, it was pleased with the performance of its Chinese joint venture and better than expected growth in high margin genetics licensing. Overall, with its shares changing hands well below historical multiples, the broker believes Costa is attractive in the context of its earnings growth. The Costa share price was fetching $2.79 at Friday’s close.

South32 Ltd (ASX: S32)

Analysts at Morgans have retained their add rating but trimmed their price target on this mining giant’s shares to $5.50. According to the note, the broker felt South32 delivered a strong full year result, which was in line with consensus estimates. And while Morgans acknowledges that earnings multiples are regularly inconsistent value indicators in resources, it believes that in South32’s case, it shows the market is misjudging how much residual earnings power will remain in the business post cycle peak. The South32 share price was trading at $4.23 on Friday.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• ASX 200 reporting season weekly wrap: Top risers and fallers
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Costa share price grows on fruitful first-half results
• Allkem share price higher following massive FY22 profit growth
• South32 share price gains ground on record FY22 earnings and special dividend

Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended COSTA GRP FPO. 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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