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:
Afterpay Ltd (ASX: APT)
According to a note out of Ord Minnett, its analysts have retained their buy rating and lifted the price target on this payments company’s shares to $105.00. The broker was pleased with Afterpay’s full year results and particularly its better than expected gross losses. It also notes that the company is expanding into Europe and testing the waters in Asia. Though, acknowledges that these are unlikely to be making meaningful contributions to its revenue until FY 2022 I agree with Ord Minnett and would buy and hold Afterpay shares for the long term.
Appen Ltd (ASX: APX)
Analysts at UBS have retained their buy rating and increased the price target on this artificial intelligence services company’s shares to $44.00 following its half year results. According to the note, Appen delivered a result that was largely in line with its estimates. It also notes that the company has reaffirmed its guidance for FY 2020 despite COVID-19 headwinds. And while this implies a sizeable skew towards the second half, UBS appears confident it will achieve this. It also remains confident in its long term prospects. I think UBS is spot on and the recent Appen share price weakness is a buying opportunity.
Zip Co Ltd (ASX: Z1P)
A note out of Morgans reveals that its analysts have retained their add rating and lifted the price target on this buy now pay later provider’s shares to $10.28. According to the note, Morgans was pleased with Zip’s stronger than expected financial performance in FY 2020 and appears confident its strong growth can continue. Especially given the impending QuadPay acquisition and the launch of Zip Business with eBay Australia. The broker expects the latter’s product mix to have positive impacts on its revenue yield. As a result, it has upgraded its earnings estimates for the near term. I would have to agree with Morgans as well. I think Zip shares could be great buy and hold options.
Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO and 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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