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:

Harvey Norman Holdings Limited (ASX: HVN)

According to a note out of Citi, its analysts have retained their buy rating and lifted the price target on this retailer’s shares to $4.50. The broker was pleasantly surprised with Harvey Norman’s sales growth during April and May. And while it isn’t clear whether its bottom line is growing as strongly, Citi appears confident that the company will deliver a solid full year result in August. I agree with Citi and feel Harvey Norman could be a decent option.

Newcrest Mining Limited (ASX: NCM)

Analysts at UBS have retained their buy rating and $35.00 price target on this gold miner’s shares. This follows the release of drilling results from Red Chris and Havieron this week. UBS was pleased with the results from Havieron and believes they are strong enough for management to seriously consider mining the orebody. It doesn’t feel this potential has been priced into its shares. I think UBS makes some good points and Newcrest could be worth considering if you’re looking for exposure to gold.

Opthea Ltd (ASX: OPT)

A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and $5.20 price target on this biotech company’s shares. This follows the release of data from its study evaluating OPT-302 in the treatment of Diabetic Macular Edema. Goldman notes that the data was unconvincing and has raised more questions than answers. Nevertheless, the broker believes the near-term story remains broadly unchanged. This is because OPT-302 has already demonstrated a statistically significant benefit in a larger trial for Wet Age-Related Macular Degeneration. This has a significant market opportunity. I agree with Goldman Sachs and think Opthea could be a top long term option.

More reading

• Keep a watch on these 3 ASX trends next week
• 3 gold mining shares that may be a buy today
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• Top brokers name 3 ASX 200 shares to buy today
• Why the Newcrest share price is up today

Motley Fool contributor James Mickleboro 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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The Orcoda Ltd (ASX: ODA) share price is one of the few shining lights on the market today. Despite the ASX in a sea of red, Orcado shares are up 40.91% at the time of writing on the back of a contract win.

Despite this rise, however, Orcoda shares are still very much at the smaller end of the ASX spectrum. With shares last changing hands at 15.5 cents, the company’s market capitalisation currently stands at around $18 million.

Orcoda is a logistics solution provider that specialises in business efficiency and optimisation of processes. The company focuses on three key business sectors: healthcare, transportation and resources.

Why is the Orcoda share price defying gravity?

Shortly after the market closed yesterday, Orcoda announced that its subsidiary, Resource Connect Logistics, has signed a nine-year contract with the Mt Buller Ski Resort in Victoria.

The contract comprises a five-year term plus two additional two-year options. Under the arrangement, Resource Connect Logistics will provide guest transit services and rideshare services to Mt Buller Ski Resort customers during the annual ski seasons.

With this, Orcoda will be tasked with ensuring all customers are efficiently moved around the mountain during its seven days a week, two shifts per day operations.

The contract is expected to generate around $2 million to $3 million revenue per annum. And if it runs the full 9-year term, contract revenue value is estimated to be between $20 million and $30 million.

To put these figures into perspective, Orcoda generated $2.4 million revenue in FY19.

The company stated it will be using the technology it has developed for its resource projects and healthcare projects to deliver the Mt Buller project, along with specifically developed platforms for the ski resort.

The company will also work closely with its key supplier Busfleet who supplies Orcoda will all of its buses and drivers.

Management commentary

Commenting on the contract win, Orcoda managing director Geoff Jamieson said:

“Orcoda was awarded this long term contract to provide transport services by the Mt Buller Resort because Orcoda management have a proven history of effectively managing high volume transport requirements, with long term customers, across multiple industries, whilst utilising best in class efficiency and optimization software.”

“COVID-19 restrictions may have an effect on our achievements this ski season but the nature of this agreement should provide long term benefits to the customers of Mt Buller Resort and Orcoda stakeholders,” he added.

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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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The CSL share price is currently trading 16.7% below its all-time high of $342.75. As we have seen recently, many quality shares that have been sold-off can surge in an unstoppable rally on the turn of a dime.

With the CSL share price consolidating, is now the time to buy shares in the biotech giant before its too late?

Why is the CSL share price not at all-time highs?

The fact that CSL is trading below its all-time highs could reflect portfolio rotation among many investors. With the broader market performing stronger than expected, many investors will be opting to take their profits and sell blue-chips like CSL. By freeing up capital, investors can then load their portfolio with more beaten-down laggards and other cyclical shares.

In addition to portfolio rotation, some investors might be selling their CSL shares as the company faces rising collection costs during the coronavirus pandemic.

How has CSL performed during the pandemic?

Although CSL is not actively participating in the race to develop a vaccine for COVID-19, the biotech giant is working to develop potential therapies by collecting plasma from recovered patients. In conjunction with other global biotech companies, CSL has launched a campaign in the US encouraging recovered COVID-19 patients to donate plasma. CSL is also collecting recovered donor plasma in Australia, with the company partnering with the Australian Red Cross Lifeblood Service.

There have been some concerns that the global shutdowns as a result of the pandemic may result in a supply shortage in plasma collection. In addition, CSL has the obligation to ensure the safety of its donors by undertaking various disinfecting and screening protocols, which could impact margins.  

Bullish broker note

Earlier this month, analysts from broker UBS released a bullish note on CSL and slapped a $342 12-month price target on the company. Analysts flagged a 15% decline in plasma collection volume for the April–June period, however volumes are expected to recover as US states move to ease regulations. Researchers from the broker continue to see CSL as the preferred option in the health sector based on the company’s robust product pipeline and low level of gearing.

Should you buy?

In my experience, the fear of missing out, especially in unprecedented times such as this, can cloud the decision making of the most experienced investor. However, in the case of a quality company such as CSL, the decision should be straightforward. This market darling has a strong capital position with more than $1 billion in available liquidity and has also reaffirmed its profit guidance for FY20.

If portfolio rotation is the cause for a drop in CSL’s share price, I think that it won’t be sustained for too long and buyers should flood in again. For more cautious investors it may be prudent to wait until August when CSL reports its full-year results to get a better picture of where the company stands.

More reading

• Top brokers name 3 ASX 200 shares to buy today
• Where to invest $5,000 into ASX 200 shares immediately
• Is the CSL share price in the buy zone?
• 3 companies with great intangible asset moats
• Why CSL, Harvey Norman, IPH, & Saracen shares are charging higher

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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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