Top brokers name 3 ASX shares to buy next week

It was another busy week for Australia’s top brokers. This has led to a number of broker notes being released.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

DroneShield Ltd (ASX: DRO)

According to a note out of Bell Potter, its analysts have retained their buy rating and $4.80 price target on this counter-drone technology company’s shares. Bell Potter was pleased with DroneShield’s performance in the first quarter, highlighting that revenue was up 121% on the prior corresponding period and ahead of expectations. The broker was also pleased that the company’s SaaS revenue continues to grow strongly. It now represents 6.9% of total revenue. Looking ahead, Bell Potter thinks DroneShield has a market leading offering and a strengthening competitive advantage. As a result, it believes the company is well-positioned to benefit from an expected wave of spending on counter-drone solutions. It suspects that this will lead to material contracts flowing from its $2 billion+ potential sales pipeline over the next three to six months. The DroneShield share price ended the week at $3.72.

NextDC Ltd (ASX: NXT)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating on this data centre operator’s shares with a slightly reduced price target of $18.00. The broker notes that NextDC has raised capital to support accelerated construction plans. Morgan Stanley points out that NextDC is doing this having won its largest-ever single contract with a 250MW customer for the S4 data centre in Sydney. And while it concedes that NextDC shares trade at a premium to US peers, the broker believes this is justified given its significantly stronger growth outlook. The NextDC share price was fetching $14.95 at Friday’s close.

Pro Medicus Ltd (ASX: PME)

Analysts at Morgans have retained their buy rating on this health imaging technology company’s shares with a reduced price target of $210.00. According to the note, the broker has revised its financial model for Pro Medicus. This includes deliberately setting a lower bar for its estimates. Morgans notes that its remodelled estimates prioritise achievability over optimism. In addition, they stage implementation revenue conservatively and mark foreign exchange to spot. The broker believes this is the right framework for a stock where sentiment has been fragile of late. Nevertheless, Morgans believes Pro Medicus’ growth story remains untarnished, highlighting that contract news flow since February has been exceptional. This includes ~$100 million in wins and renewals, all at higher pricing, with cardiology upsell gaining traction. The Pro Medicus share price ended the week at $138.34.

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

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Motley Fool contributor James Mickleboro has positions in Nextdc and Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.