Australia’s top brokers have been busy adjusting their estimates and recommendations 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 shares are in the buy zone:
BHP Group Ltd (ASX: BHP)
According to a note out of UBS, its analysts have upgraded this mining giant’s shares to a buy rating with a $38.00 price target. The broker made the move largely on valuation grounds after a sizeable decline in its share price over the last three months. It believes this is a buying opportunity and notes that BHP is well-placed to continue paying strong dividends through the pandemic. The broker also sees the easing of lockdowns globally as a big positive. I agree with UBS on BHP and would be a buyer of its shares.
Commonwealth Bank of Australia (ASX: CBA)
Analysts at Citi have retained their buy rating and $68.75 price target on this banking giant’s shares following its third quarter update. Commonwealth Bank’s profits are running short of the broker’s expectations for the second half. However, it notes this is due to a $1.5 billion COVID-19 provision. And while the broker appears doubtful on its final dividend and has downgraded its CET1 ratio forecast, it still sees value in its shares at this level. I think Citi is spot on with this assessment and feel Commonwealth Bank’s shares are very attractively priced.
Xero Limited (ASX: XRO)
A note out of Credit Suisse reveals that its analysts have retained their outperform rating and lifted the price target on this business and accounting software provider’s shares to $88.00. Credit Suisse was pleased with Xero’s performance in FY 2020 and notes that it delivered a quality full year result. And while it has downgraded its estimates for FY 2021 slightly to reflect the impact of the pandemic, it remains very positive on its long term growth prospects. I would have to agree with Credit Suisse and feel its recent share price weakness is a buying opportunity.
And here are five more top stocks which have just been given buy ratings. They look very cheap after the market crash.
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Returns as of 7/4/2020
More reading
- Why Boral, Corporate Travel Management, United Malt, & Xero are dropping lower
- Why the best performing ASX stock might have more room to run higher
- ASX 200 up 0.8%: Big four banks push higher but Xero tumbles lower
- Where growth, income, and value investors can invest $5,000 today
- Want to invest like Warren Buffett? Buy and hold these ASX 200 shares
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. 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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