Brokers across Australia have been busy adjusting their discounted cash flow models to reflect new data and developments. This has resulted in several shares being given buy ratings.
Three that caught my eye are listed below. Here's why brokers have tipped them as buys:
Australia and New Zealand Banking Group (ASX: ANZ)
According to a note out of Goldman Sachs, it has a conviction buy rating and $32.92 price target on this banking giant's shares. While the broker believes the Royal Commission is likely to continue to create negative headlines in the sector, it feels the risks are more than priced in now. Furthermore, the broker points out that the banking sector's forward price-to-earnings ratio is trading at a 33% discount to the industrials sector. Whereas historically the average discount is around 24%. I would agree with Goldman Sachs that the banks are attractive at these levels.
Domino's Pizza Enterprises Ltd (ASX: DMP)
A note out of UBS reveals that its analysts have retained their buy rating and $57.50 price target on the pizza chain operator's shares. The broker believes that a strong performance from Domino's European business could help it achieve its full-year guidance. Especially if France and Germany do well at the upcoming World Cup. This echoes the view of analysts at Macquarie which upgraded Domino's last week for similar reasons. I agree with both brokers and believe Domino's could be a good option for investors, especially those prepared to hold on for the long-term.
Galaxy Resources Limited (ASX: GXY)
Analysts at UBS have upgraded this lithium miner's shares to a buy rating from neutral and increased the price target on them to $3.95. The broker has made the move after factoring in Galaxy's definitive feasibility study and the sale of tenements at its Sal de Vida project in Argentina. Last week Galaxy announced the sale of a selection of tenements at the north end of Sal de Vida to South Korean conglomerate POSCO for US$280 million. With potential offtake agreements also in the pipeline, I believe this has made Galaxy an attractive option in the resources sector. But it is still a high-risk share.
