Following on from yesterday's broker downgrades, today I thought I would look at a few shares that found favour with brokers this morning.
Three shares named by brokers as being in the buy zone right now are as follows:
Ainsworth Game Technology Limited (ASX: AGI)
According to a research note out of the equities desk at Macquarie, its analysts have upgraded the gaming machine developer, designer, and manufacturer to an outperform rating with a $2.00 price target. With its share price down 25% in the last six months, Ainsworth Game Technology certainly looks attractive. But I would suggest investor's hold off an investment until its full-year results are released next week. The company has talked up a big second-half and failure to deliver on this could lead to its share price falling further still.
Nick Scali Limited (ASX: NCK)
Analysts at Macquarie have also reiterated their outperform rating on this leading furniture retailer's shares. The research note reveals that Nick Scali's first-half result was stronger than they expected and its analysts were impressed with the company's strong start to the second-half. Not only was the outperform rating reiterated, but its target price increased to $7.60. I completely agree with Macquarie on this one and believe Nick Scali would be a great buy. After all, there are not many companies on the ASX capable of delivering half-year profit after tax growth of 44.7%.
Treasury Wine Estates Ltd (ASX: TWE)
The global wine company has had its overweight rating reiterated and price target increased to $14.00 by analysts at Morgan Stanley following the release of its first-half result. According to the release the broker was pleased with its results and believes the Diageo acquisition is starting to bear fruit. Furthermore, it sees the opportunity for margin expansion in the Americas. I'm a big fan of Treasury Wine Estates and would have to agree with Morgan Stanley with this one. I expect the growing demand for its products in China and the United States to drive strong earnings growth for the next few years. Its shares may be a little on the expensive side at 32x trailing earnings, but I believe its growth potential justifies the premium.
