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:

Lendlease Group (ASX: LLC)

According to a note out of Goldman Sachs, its analysts have retained their conviction buy rating on this international property and infrastructure company’s shares and put a $16.55 price target on them. Although Goldman was disappointed to see that Lendlease’s net profit after tax will fall well short of expectations in FY 2020, it believes the company’s profits will bounce back strongly in FY 2021. So much so, it estimates that the Lendlease share price is trading at just 11x FY 2021 earnings. I agree with Goldman Sachs and would be a buyer of its shares.

Telstra Corporation Ltd (ASX: TLS)

Analysts at UBS have retained their buy rating and $3.70 price target on this telco giant’s shares. According to the note, the broker expects Telstra’s mobile business to deliver solid EBITDA growth over the coming years. This follows its recently announced mobile plan changes. In light of this, it believes Telstra will be able to maintain its dividend at 16 cents per share until at least FY 2023. I think UBS is spot on and believe Telstra shares would be a great option for income investors.

Webjet Limited (ASX: WEB)

Another note out of UBS reveals that its analysts have retained their buy rating and lifted the price target on this online travel agent’s shares to $5.35. The broker believes Webjet’s outlook has improved greatly in recent months and has been factoring this and potential market share gains into its estimates. However, given the uncertainty in the travel market, it has warned that its shares are likely to remain volatile in the near term. Although I’m a fan of the company, I’m not convinced that the Webjet share price represents good value just yet. As a result, I intend to wait to see how its performance fares in FY 2021 before considering an investment.

More reading

• What’s going on with the Coles share price?
• ASX 200 up 0.55%: Cochlear jumps on FDA approval, Adbri crushed on contract loss
• Risk to supermarkets is rising but is Woolworths share price still a buy?
• Why I think these ASX dividend shares are strong buys
• 5 things to watch on the ASX 200 on Friday

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 and Webjet 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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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a solid gain. The benchmark index is currently up 0.55% to 6,065.9 points.

Here’s what has been happening on the market today:

Bank shares mixed.

The big four banks look to have run out of steam on Friday and are acting as a bit of a drag on the ASX 200. At the time of writing the National Australia Bank Ltd (ASX: NAB) share price is down around 0.6%. Whereas the Commonwealth Bank of Australia (ASX: CBA) share price is the best performer in the group with a 0.45% gain. The other two big four banks are trading slightly lower.

Adbri (Adelaide Brighton) crushed.

The Adbri Ltd (ASX: ABC) share price has crashed significantly lower on Friday after announcing the loss of a supply contract with Alcoa Australia. The current lime supply contract will not be renewed when it expires at the end of June 2021. Although this represents approximately $70 million or 4.6% of annual revenue, investors appear concerned others may follow. Alcoa revealed that it is switching to cheaper imported products. This brings to an end a supply relationship that has been ongoing for almost 50 years.

Cochlear gets FDA approval.

The Cochlear Limited (ASX: COH) share price is storming higher after receiving US FDA approval for four new hearing technology solutions products. These new products include the Nucleus Kanso 2 Sound Processor, Nucleus 7 Sound Processor for Nucleus 22 implant recipients, Custom Sound Pro fitting software, and the Nucleus SmartNav system. The four new systems will be commercially released in the United States and Western Europe in the coming months. This is subject to local approvals.

Best and worst performing ASX 200 shares.

The best performer on the ASX 200 at lunch is the Cochlear share price with a 5.5% gain. Investors appear pleased with the upcoming launch of the aforementioned innovative new products. The worst performer on the index by some distance on Friday has been the Adbri share price with a 24% decline. Investors appear concerned that the loss of the Alcoa supply contract could be the first of many.

More reading

• Why Adbri, BlueScope, Netwealth, & Rio Tinto shares are tumbling lower
• Why the Adbri share price is crashing 26% lower today
• Cochlear share price charges higher on US FDA update
• Risk to supermarkets is rising but is Woolworths share price still a buy?
• 5 things to watch on the ASX 200 on Friday

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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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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After a COVID-19 production update released before trade this morning, the Tubi Ltd (ASX:2BE) share price soared more than 250% in early trade. 

Tubi announces production turnaround

Despite the disruptions of the coronavirus pandemic, Tubi’s company update announced that it’s seen a significant production turnaround.

During Q4 and Q4 FY20 the company achieved a 55% increase in production volume. Tubi increased its production volume through a 85% increase in month-on-month volume from April to May and a further 51% increase in volume from May to June.

Tubi attributed the turnaround in production volume to its mobile technology and ability to produce onsite, long-length piping. The company outlined its production strategy in its March investor presentation and results are currently in line with this thanks to its recent volume increase.

Tubi also confirmed its existing production orders at its Florida plant through July and August. The company’s Chief Executive Officer, Marcello Russo stated that “Significant orders from key strategic clients are increasing, resulting in greater product diversity and volumes.”

In addition, Russo reassured investors that, “With the third manufacturing plant commissioned and operating, Tubi is well positioned to service these growing orders through covid-19.”  

What does Tubi do?

Tubi is an Australian-based manufacturer of specialised, large-diameter high-density polyethylene (HDPE) piping. The company uses its piping for water, irrigation, oil and gas, mining, and infrastructure. Tubi’s competitive advantage comes from the company’s mobile production plants which allow a reduction in manufacturing and transportation costs.

Tubi currently has 3 production plants operating in the US, with 2 plants in Florida and 1 in Texas. The company’s Florida operations were classified as an essential service and continued operations during the COVID-19 pandemic.

In addition to mobile plants, Tubi also boasts lower costs and faster installation than its competitors. Tubi’s key drivers include efficient production, economies of scales, spread price and substantial cost savings to clients. The company holds its own sales team and has first rights to over 15 projects.

Foolish takeaway

At the time of writing, the Tubi share price is trading 100% higher at around 15 cents. The company opened the day at 9 cents and hit an intraday high of 33 cents. 

More reading

• ASX 200 up 0.55%: Cochlear jumps on FDA approval, Adbri crushed on contract loss
• Why Lovisa, PointsBet, Transurban, & WiseTech shares are racing higher
• BrainChip share price up 25% on milestone
• Why Adbri, BlueScope, Netwealth, & Rio Tinto shares are tumbling lower
• Why the Adbri share price is crashing 26% lower today

Motley Fool contributor Nikhil Gangaram 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 S&P/ASX 200 Index (ASX: XJO) is on course to finish the week on a positive note. In late morning trade the index is up a sizeable 0.7% to 6,073.1 points.

Four shares climbing more than most today are listed below. Here’s why they are racing higher:

The Lovisa Holdings Ltd (ASX: LOV) share price is up almost 7% to $6.53. This follows the release of a full year sales update by the fashion jewellery retailer. According to the update, Lovisa’s sales revenue for FY 2020 (excluding franchise revenue) came in at $237 million. This represents a 4.8% decline on FY 2019’s sales revenue of $249 million. Investors appear pleased with this result given how its stores were forced to close during the pandemic.

The PointsBet Holdings Ltd (ASX: PBH) share price has jumped 6% higher to $6.06. Investors have been buying the sports betting company’s shares after its U.S. business entered into a new multi-year deal to become a gaming partner of the Detroit Tigers Major League Baseball (MLB) team. This is the first of its kind in the MLB.

The Transurban Group (ASX: TCL) share price is up over 2% to $14.85. The catalyst for this gain appears to have been a broker note out of Ord Minnett. Its analysts have upgraded the toll road operator’s shares to an accumulate rating with a $16.00 price target. Ord Minnett is expecting Transurban’s earnings to recover close to pre-pandemic levels by FY 2023.

The WiseTech Global Ltd (ASX: WTC) share price is up 5% to $20.69. This is despite there being no news out of the logistics solutions company. However, its shares have fallen heavily this week after it revealed that its CEO offloaded almost $46 million worth of shares late last month. Investors may believe the sell off was unnecessary and have been taking advantage of the pullback.

More reading

• PointsBet share price zooms 5% higher on Detroit Tigers deal
• Lovisa share price on watch after full year sales update
• 3 high quality ASX dividend shares for patient investors
• What’s next for WAAAX shares?
• Fund managers have been snapping up Sonic and these ASX 200 stocks

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 Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of Transurban Group and WiseTech Global. The Motley Fool Australia has recommended Pointsbet Holdings 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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The BrainChip Holdings Ltd (ASX: BRN) share price rose by 25% on Thursday. This was essentially due to the company achieving a milestone in the development of its Akida Neuromorphic System-on-Chip. Now, if you’re a non-tech type, this probably means very little to you. Suffice to say that the company is an artificial intelligence (AI) startup which, in the words of its CEO, Louis DiNardo, just reached an “…exciting and pivotal moment in BrainChip’s evolution to commercialize a very powerful technology that addresses the burgeoning AI Edge market…”

If, on the other hand, you are technically inclined, feel free to read on for more details on this development. 

What does the company do?

BrainChip is a United States based company listed on the ASX that is focused on neuromorphic technologies. Neuromorphic systems are large-scale systems of integrated circuits. Therefore, as the name implies, they mimic the human nervous system. In addition, Neuromorphic Computing is considered the 5th generation of artificial intelligence by the Artificial Intelligence Board of America. Having listed on the ASX in 2011, BrainChip has three main products:

First, The Akida Development Environment (ADE). ADE is a complete, industry-standard, machine learning framework for creating and training neural networks to run on the company’s Akida Neural Processor. Still with me?

Second, the Akida Neural Processor is an ultra-low power network processor. This is actually the brain that powers the continuous learning that AI is based on. Furthermore, the increased responsiveness and greater power efficiency of the system can help reduce the carbon footprint of data centers by reducing the need for cooling.

Third was the subject of today’s announcement. The Akida Neural Processor System-on-Chip (NSoC), a revolutionary new breed of neural processing computing device. Each of these effectively has 1.2 million neurons and 10 billion synapses which results in significantly greater efficiency than other neural processing devices on the market.

What caused the BrainChip share price to climb?

BrainChip and the company’s partners have completed the fabrication of the NSoC integrated circuit (IC) wafer. Next, the company will be completing the assembly and test operations. After that, the prototype chip will enter the initial evaluation program, and then be shipped to customers that have signed agreements for the early access program.

BrainChip has previously announced the signing of an agreement with Valeo Corporation, a Tier-1 European automotive supplier of sensors and systems for Advanced Driver Assistance Systems (ADAS) and Autonomous Vehicles (AV). This agreement ensures BrainChip will receive milestone payments during the development stage of the NSoC IC.

The BrainChip share price rallied 25% on Thursday to close at 11 cents, bringing its market capitalisation to just over $162 million. In addition, the company’s share price is up by 120% over the calendar year to date. Whether this momentum continues will likely depend on the progress of BrainChip’s assembly and testing phases of the product’s development. Watch this space…

More reading

• Brainchip share price rockets 42% after signing agreement with tier 1 automotive supplier

Motley Fool contributor Daryl Mather 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a high. At the time of writing the benchmark index is up 0.9% to 6,088.8 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

The Adbri Ltd (ASX: ABC) share price has crashed 25% lower to $2.38. Investors have been selling the building materials company’s shares after Alcoa of Australia decided not to renew its current lime supply contract when it expires at the end of June 2021. Although this contract currently constitutes approximately $70 million or 4.6% of annual revenue, investors appear concerned that others may follow. Alcoa is switching to cheaper imported products and will bring to an end a supply relationship that has been ongoing for almost 50 years.

The BlueScope Steel Limited (ASX: BSL) share price is down 3.5% to $11.02. The catalyst for this appears to be a broker note out of Morgan Stanley this morning. Its analysts have downgraded the steel producer’s shares to an underweight rating and cut the price target on them to $10.00. It made the move after reducing its earnings estimates for the near term.

The Netwealth Group Ltd (ASX: NWL) share price has fallen 2.5% to $9.24. This decline also appears to be due to a broker note. Credit Suisse has downgraded the investment platform provider’s shares to an underperform rating with an $8.30 price target. It expects Netwealth’s revenue margin to soften and its earnings growth to slow. As a result, it feels the market is currently expecting too much from it at present.

The Rio Tinto Limited (ASX: RIO) share price is down 0.5% to $97.37. This follows an update on its Oyu Tolgoi mine in Mongolia. An updated feasibility study has incorporated a new mine design for Panel 0 of the Hugo Dummett North underground mine. However, the new study includes an increase of US$1.3 billion to US$1.8 billion from the original US$5.3 billion development capital.

More reading

• Why the Adbri share price is crashing 26% lower today
• Rio Tinto share price on watch after Oyu Tolgoi update
• Fund managers have been snapping up Sonic and these ASX 200 stocks
• ASX 200 stocks to watch for FY2021
• 2 shares to buy before earnings season

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Netwealth. 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 Adbri Ltd (ASX: ABC) share price is on course to end the week in a very disappointing fashion.

In morning trade the building materials company’s shares have crashed as much as 26% lower to $2.32.

Why did the Adbri share price crash lower?

This morning Adbri, formerly known as Adelaide Brighton, released an announcement relating to its lime supply contract with Alcoa of Australia.

According to the release, Adbri’s subsidiary, Cockburn Cement, has been informed by Alcoa of Australia that it has decided against renewing its current lime supply contract when it expires on 30 June 2021.

This is a bit of a blow for Adbri, given that the contract currently constitutes approximately $70 million in annual revenue.

For the 12 months ended 31 December 2019, Adbri’s revenue from continuing operations came in at $1,517 million. This means this contract represents 4.6% of its total revenue.

Management notes that this non-renewal is not expected to materially impact its revenue until post June 2021. In the meantime, it will quickly evaluate and take necessary mitigating actions.

As a result, at this stage it has warned that it is not possible to quantify the full financial impact of the non-renewal.

The company’s CEO, Nick Miller, was disappointed with the non-renewal but remained upbeat on the future.

The chief executive commented: “We are disappointed with Alcoa’s decision to displace locally manufactured product with imports from multiple sources, particularly considering our almost 50-year uninterrupted supply relationship. We will work quickly to mitigate the impact on local jobs supporting our lime business and we remain committed to supplying our WA resources sector customers.”

Foolish Takeaway.

This non-renewal is certainly a blow for Adbri given its long-standing relationship with Alcoa.

And while the loss of 4.6% of total revenue may not appear to be worth a 26% decline in the Adbri share price, I suspect investors are concerned that other customers may ultimately switch to cheaper imports in the future.

This could mean the company will have to reduce prices, at the expense of its margins, in order to remain competitive in the coming years.

More reading

• Next phase of bull market could see ANZ Bank outperform Afterpay
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
• These were the best performers on the ASX 200 last week

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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In morning trade the PointsBet Holdings Ltd (ASX: PBH) share price is pushing higher.

At the time of writing the sports betting company’s shares are up 5% to $6.00

Why is the PointsBet share price zooming higher?

Investors have been buying PointsBet’s shares this morning after its U.S. business entered into a new multi-year deal to become a gaming partner of the Detroit Tigers Major League Baseball (MLB) team.

This deal is the first sports betting partnership for a professional sports team within Michigan and follows the state’s legalisation of sports betting in 2019. It is also the first such partnership for any MLB franchise.

According to the release, the agreement between PointsBet and the Detroit Tigers will begin for the upcoming 2020 Tigers season.

What does the agreement include?

As part of the multi-year deal, PointsBet will have television broadcast-visible branding at Comerica Park and be featured on the Detroit Tigers Radio Network.

PointsBet will also have a sponsored presence on the Tigers’ digital platforms and be regularly featured on The Word on Woodward. This is a twice-weekly live streaming show that airs on the club’s channel. The company’s platform will also be integrated into The District Detroit app and the MLB Ballpark app.

Johnny Aitken, CEO of PointsBet USA, commented: “The PointsBet team is excited to announce our ground breaking deal with the Detroit Tigers and Major League Baseball, becoming the first legal sports betting operator to partner with an MLB franchise.”

“PointsBet operates in rare space within the industry by owning our technology environment from end to end, which allows us to be extremely nimble on product innovation and personalized offerings to complement our app’s market-leading speed. We are excited to inject a unique and robust betting proposition into the great state of Michigan,” he added.

This sentiment was echoed by Chris Granger, Group President, Sports & Entertainment of Detroit Tigers owner, Ilitch Holdings.

He said: “We are thrilled to welcome PointsBet as a gaming partner of the Detroit Tigers. As we usher in legal and responsible sports betting, we look forward to the fan-friendly enhancements that it will make to the game-day experience in and around Comerica Park.”

More reading

• 2 red hot ASX growth shares
• 3 great shares to buy now if you’re an ASX 200 investor in your 20s
• The Sezzle and Pointsbet share prices have hit new, all time highs. Time to invest?

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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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The Cochlear Limited (ASX: COH) share price is pushing higher on Friday after the release of a positive update.

At the time of writing the implantable hearing solutions company’s shares are up 2% to $196.28.

What did Cochlear announce?

This morning Cochlear announced that it has obtained US FDA approval for four new hearing technology solutions products.

These include the Nucleus Kanso 2 Sound Processor, Nucleus 7 Sound Processor for Nucleus 22 implant recipients, Custom Sound Pro fitting software, and the Nucleus SmartNav system.

Management notes that these products reflect its ongoing commitment to innovation in hearing technology. The four new systems will be commercially released in the United States and Western Europe in the coming months. This is subject to local approvals.

Nucleus Kanso 2 Sound Processor.

The Nucleus Kanso 2 Sound Processor is the world’s smallest off-the-ear cochlear implant sound processor with proven hearing performance technologies.

It is the first and only off-the-ear cochlear implant sound processor to offer direct streaming from compatible Apple or Android devices. It is also compatible with the Nucleus Smart App, enabling control of device settings, functions, and information.

Nucleus 7 Sound Processor for Nucleus 22 implant recipients.

The Cochlear Nucleus 7 Sound Processor is now compatible for cochlear implant recipients with a Nucleus 22 implant.

This means that current Nucleus 22 implant recipients can now upgrade to its latest behind-the-ear sound processor. They will also, for the first time, be able to access direct smartphone connectivity and streaming from compatible Apple or Android devices.

Custom Sound Pro fitting software.

The Custom Sound Pro supports clinicians in fitting Cochlear’s sound processors. Management advised that the software harnesses almost 40 years of experience and input from thousands of clinicians worldwide.

The fitting software keeps the patient at the centre of care. This is thanks to its new dashboard and Patient Goals feature, promoting patient engagement, and facilitating more effective tracking of progress between appointments.

Nucleus SmartNav system.

Finally, the Nucleus SmartNav system is a new tool that has been designed to support surgeons in optimising electrode placement during cochlear implant surgery.

It delivers wireless, actionable intraoperative insights to support electrode insertion with real-time navigation. This provides surgeons with added assurance of a successful surgical outcome for their patients.

The system consists of an innovative iPad-based solution and a surgical sound processor that presents an intuitive workflow to support surgery. This gives surgeons additional feedback for in-theatre decision making.

More reading

• Why I would buy and hold a2 Milk and this ASX 200 share until 2030
• These are 2 quality ASX shares to buy with $2,000
• Why National Storage shares are a great “set and forget” option for your portfolio
• Give your portfolio a boost with these ASX blue chip shares
• Australian businesses are running out of cash

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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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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