Many of Australia's leading brokers have been busy once again adjusting their discounted cash flow models and valuations accordingly as new data becomes available.
Three shares that have come out of this favourably are listed below. Here's why they have buy ratings on their shares:
Australia and New Zealand Banking Group (ASX: ANZ)
According to a note out of Goldman Sachs, the broker has the banking giant on its conviction buy list with a price target of $33.18. Despite the widening London Interbank Offered Rate (LIBOR) and the Overnight Indexed Swap (OIS) rate spread, Goldman believes that ANZ is the bank which will be least impacted and expects its net interest margin to be largely unaffected. This should allow the bank to benefit from solid capital and asset quality trends. While it isn't my first pick in the industry, I would agree with Goldman that it is a buy.
Rio Tinto Limited (ASX: RIO)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $94.00 price target on Rio Tinto's shares after the mining giant sold its Hail Creek and Valeria coal project stakes to Glencore. The price that Rio Tinto achieved was ahead of both the broker's forecasts and its book value estimate. This has Macquarie now predicting a better than expected price for its Kestrel asset. I agree with the broker on this one as well. I think Rio Tinto is a great option for investors looking for exposure to the resources sector.
Webjet Limited (ASX: WEB)
Analysts at Ord Minnett have retained their buy rating but cut the price target on the online travel agent's shares to $13.96 from $14.35. The broker likes Webjet largely for its flight booking business which it believes has the potential to continue its outperformance. It was also pleased with the start that the JacTravel business has had and appears confident in the Thomas Cook deal. I think Webjet is the best option in the travel industry right now and would agree that it is a buy.
