Many of Australia’s top brokers have been busy adjusting their financial models 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:

Altium Limited (ASX: ALU)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $40.00 price target on this electronic design software company’s shares. Morgan Stanley notes that Altium expects to fall short of the market’s revenue expectations (US$192 million) in FY 2020 because of the pandemic’s impact on sales this month. While this is disappointing, the broker believes that investors should be focusing on its very positive long term outlook. I agree with Morgan Stanley and feel it is well worth sticking with Altium.

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

Analysts at Morgans have retained their add rating and lifted the price target on this banking giant’s shares to $21.00. According to the note, the broker believes the bad debt damage being factored into its share price is overdone. It doesn’t expect the bad debt experience from the current crisis to be as bad as the global financial crisis because of central bank and Federal Government action. I agree with Morgans and think ANZ is a good option for investors right now.

Woolworths Group Ltd (ASX: WOW)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted the price target on this conglomerate’s shares to $40.50. The broker made the move after Woolworths released a trading update which revealed strong sales growth for its Food, Liquor, and Big W businesses. And while its Hotels business continues to weigh on its performance, the broker is optimistic this headwind will start to ease now that venues are reopening. I think Macquarie makes some great points and Woolworths could be a blue chip to buy.

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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 Altium. The Motley Fool Australia owns shares of Woolworths Limited. 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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The Mayne Pharma Group Ltd (ASX: MYX) share price is climbing today after revealing its E4/DRSP drug is one step closer to commercialisation.

At the time of writing, Mayne Pharma shares have jumped 4.6% to 38.7 cents after rallying as much as 8.1% in morning trade.

What did Mayne Pharma announce?

This morning, Mayne Pharma revealed the new drug application (NDA) for E4/DRSP to prevent pregnancy has been accepted for review by the US Food and Drug Administration (FDA).

The NDA submission includes results from two phase 3 clinical studies conducted in more than 3,725 women aged 16 to 50.

E4/DRSP is a novel combined contraceptive pill that contains 15mg of estetrol (E4) and 3mg of drospirenone (DRSP). 

The drug is being developed by strategic partner Mithra Pharmaceuticals SA, a biotech based in Belgium.

Mayne signed a 20-year exclusive supply and license agreement with Mithra in October 2019 to commercialise E4/DRSP in the US. This was followed by a similar agreement for the Australian market announced in May.

What is the market opportunity for E4/DRSP?

If approved, E4/DRSP would be the first contraceptive product containing E4. It would also be the first new estrogen introduced in the US for contraceptive use in approximately 50 years.

Mayne believes the US contraceptive market is valued at US$5.4 billion. The short acting combined hormonal oral contraceptives component of the market is estimated at US$4 billion, with approximately 135 million units sold annually.

Meanwhile, Mayne states that the Australian contraceptive market is valued at $130 million, with approximately 14 million short acting combined hormonal oral contraceptives sold annually.

Management commentary

Commenting on today’s update, chief executive Scott Richards said:

“This is another important milestone for E4/DRSP and brings us one step closer to providing women in the US with a new contraceptive that we believe will be effective, safe and well-tolerated. We look forward to working with the FDA and Mithra during the ongoing review of our application.” 

“In parallel, we continue to advance our US commercial strategy and infrastructure to ensure we are well positioned to support the potential launch of E4/DRSP in the first half of calendar 2021,” Mr Richards added.

Mayne has plans to file E4/DRSP with the Australian Therapeutic Goods Administration this calendar year.

More reading

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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I am particularly attracted to ASX healthcare shares right now. The world’s growing and ageing population is driving an ever-increasing demand for healthcare services.

Here we take a close look at 3 of my top ASX healthcare share picks in CSL Limited (ASX: CSL), Ramsay Health Care Limited (ASX: RHC) and ResMed Inc (ASX: RMD).

All 3 have evolved to become global leaders in their respective healthcare segments.

CSL

CSL has grown from strength to strength over the past 3 decades.

It has evolved from a very small federal government department to become one of, if not the largest company on the ASX. It currently has a market capitalization of $132.5 billion.

The company is now a global market leader in blood plasma research and disease treatment. It has an impressive global product reach spanning more than 60 countries.

CSL has also become a world leader in the quest to find an effective treatment for the coronavirus. It has recently entered into an agreement to ramp up the development of a COVID-19 vaccine candidate.

I believe that CSL is well-positioned to continue growing its revenue base strongly over the next 5–10 years. A strong new product development pipeline will drive this growth.  

Ramsay

Another ASX healthcare company I would consider buying right now is Ramsay. Like CSL, it also has evolved significantly over the past few decades. It is now Australia’s largest private healthcare provider. Ramsay operates in 11 other countries including the United Kingdom, France, Indonesia, Malaysia and Italy.

Its global scale enables the company to spread its operating costs. It also gives Ramsay a competitive advantage over its smaller rivals in negotiations with health provider insurance companies.

A pause on some elective surgeries during the early phase of the coronavirus pandemic saw Ramsay’s share price impacted. However, these bans are gradually being lifted.

Ramsay has also successfully signed a number of key government deals in Australia and the United Kingdom during the pandemic.

ResMed

ResMed has also grown modest origins to become a leading global healthcare operator in its market niche.

This ASX company manufactures devices and cloud-based software solutions for the treatment of sleep apnoea as well as other chronic respiratory illnesses.

ResMed continues to grow its revenue base strongly. It achieved an impressive 47% increase in net income during Q3 FY20.

I see a strong demand for ResMed’s products continuing well into the next decade. It is estimated that around 1 billion people are impacted by sleep apnoea worldwide, while more than 80% of cases are undiagnosed globally.

More reading

• Invest like Warren Buffett by buying and holding these ASX 200 shares
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• ASX 200 Weekly Wrap: ASX back in the green
• These fantastic healthcare ASX shares could make you wealthy

Phil Harpur owns shares of CSL Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Ramsay Health Care Limited and ResMed Inc. 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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