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 200 shares are in the buy zone:
Appen Ltd (ASX: APX)
According to a note out of UBS, its analysts have retained their buy rating and lifted the price target on this artificial intelligence (AI) company’s shares to $41.00. The broker has been looking into the industry and believes that Appen’s second half outlook is very positive. Especially given recent hiring activity, which it feels indicates that its government business is performing well. Overall, the broker remains very positive on its growth prospects over the medium term. I agree with UBS and think Appen would be a fantastic buy and hold option.
Goodman Group (ASX: GMG)
Analysts at Morgan Stanley have retained their overweight rating and lifted the price target on this property company’s shares to $20.00. According to the note, Goodman Group delivered an FY 2020 result in line with its expectations. And while its guidance for the year ahead is a little lower than the broker is forecasting, it notes that the company has consistently outperformed its guidance for a number of years. Furthermore, with the ecommerce tailwind in its sails, Morgan Stanley expects its strong form to continue into FY 2022 as well. I think Morgan Stanley is spot on and would be a buyer of Goodman Group’s shares.
Telstra Corporation Ltd (ASX: TLS)
A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating but trimmed their price target slightly on this telco giant’s shares to $3.90. According to the note, the broker was pleased with its FY 2020 result, but notes that its guidance has caused dividend doubts. However, the broker believes Telstra could shift its dividend policy to be based on free cash flow rather than earnings. If it does this, it would be able to sustain its 16 cents per share dividend. As such, it holds firm with its forecast for no dividend cuts in FY 2021. I agree with Goldman Sachs and feel Telstra would be a good option for income investors after its pullback.
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More reading
- Brokers just downgraded the Telstra share price and these other ASX 200 stocks
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- Is the Telstra dividend in danger? This leading broker thinks it’s safe
- 3 ASX shares that could grow rapidly during the 2020s
- ASX 200 drops 0.7%, Telstra falls 7.7%
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Appen Ltd. 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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