Why these buy-rated ASX shares stand out to me

When brokers upgrade stocks or reaffirm buy ratings after a period of weakness, I always pay attention.

Not because I blindly follow recommendations, but because I want to understand what the market might be missing. Right now, three buy-rated ASX shares stand out to me for different reasons: REA Group Ltd (ASX: REA), Life360 Inc. (ASX: 360), and CSL Ltd (ASX: CSL).

Here’s why they’ve caught my eye.

REA Group shares

REA’s half-year result wasn’t perfect, and the share price reaction suggested the market wanted more. But when I look past the noise, I actually see a very resilient franchise.

Morgans recently upgraded REA to a buy recommendation with a $230.00 price target, arguing that recent weakness has created an opportunity.

What stands out to me is the resilience of the core business. As the broker pointed out, “REA’s 1H26 result was broadly in line with expectations” and the result “highlighted the resilience of the franchise in a tougher volume environment.”

In a period where listings declined 6%, REA still delivered strong yield growth of 14%. That tells me pricing power is intact. When you can offset lower volumes with higher yields, you have a strong platform.

Yes, costs were higher and full-year volume guidance was lowered. But to me, this looks cyclical rather than structural. REA remains the dominant property listings platform in Australia, and that network advantage is incredibly hard to disrupt.

Life360 shares

Life360 has been caught up in broader software weakness, particularly around AI disruption fears. But I agree with Bell Potter’s view that this business doesn’t neatly fit the traditional SaaS narrative.

The broker argues that “Life360 is an app rather than software company so faces little risk of AI disruption given the ecosystem it has developed over >15 years.”

That’s important. This isn’t just a back-end accounting tool that can be replaced by automation. It’s a consumer-facing safety platform built around a sticky, long-standing user base.

Bell Potter also notes that “the 2025 result is already largely known” following the January update, which reduces the risk of nasty surprises. Revenue grew more than 30% and profitability improved sharply. That gives me comfort heading into the next result.

On FY26 expectations, consensus adjusted EBITDA sits around US$132m, and the broker expects guidance to be at least consistent with that. In other words, expectations don’t look stretched.

Add in 20% monthly active user (MAU) growth guidance and a valuation of around 31x and 21x EV/Adjusted EBITDA for 2026 and 2027 respectively, and I can see why Bell Potter believes it “looks value for forecast growth of c.45% in both periods.”

With a buy recommendation and a $41.50 price target, I think this is one of the more interesting growth setups on the ASX right now.

CSL shares

CSL’s half-year result was messy. Morgans described it as “softer and less clean than expected,” with adjusted NPATA down 7% and US$1.1bn in impairment charges related largely to Vifor and Seqirus.

That understandably weighed on sentiment.

But here’s what matters to me: despite Behring weakness and CEO transition noise, FY26 guidance was maintained.

Morgans sees this as pointing to “an execution reset, not structural impost.” That’s a key distinction. If the issue is execution, it can be fixed. If it’s structural, that’s far more serious.

The broker believes the outlook is supported by cost-outs, marketing initiatives, new product launches, and diminishing headwinds. Even after trimming forecasts and lowering its price target to $241.34, it retained a buy recommendation.

I tend to agree with that view. CSL is not a short-term momentum stock. It’s a global biotech leader navigating a tougher period. If management can deliver the expected second-half recovery, sentiment could shift quickly.

Foolish takeaway

REA, Life360, and CSL are very different businesses. But what they share right now is broker support, credible long-term growth drivers, and share prices that don’t fully reflect their potential, in my view.

I don’t buy stocks just because a broker says buy. But when I see solid reasoning, realistic forecasts, and resilient business models backing those calls, it definitely makes me look twice.

The post Why these buy-rated ASX shares stand out to me appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.