Many of Australia's leading brokers have been as busy as ever crunching numbers and responding to recent share price movements.
This has led to a number of broker notes coming in today with buy and sell recommendations.
Three buy recommendations that caught my eye are listed below. Here's why brokers think they are in the buy zone:
Rio Tinto Limited (ASX: RIO)
According to a note out of UBS, it has retained its buy rating and $90.00 price target on this mining giant's shares after its board approved the US$2.6 billion capital expenditure to develop the 43mtpa Koodaideri iron ore mine in the Pilbara. The broker believes that Koodaideri could be important in the medium term as it has the potential to position Rio Tinto as the world's lowest-cost iron ore producer. I agree with UBS on Rio Tinto and think it would be a good option for investors looking for exposure to the resources sector.
Suncorp Group Ltd (ASX: SUN)
A note out of Goldman Sachs reveals that its analysts have retained their buy rating and cut the price target on the insurance and banking giant's shares down slightly to $15.70. According to the note, Suncorp's shares have underperformed the market since the release of its full year results and the broker believes that valuation support is emerging now. In addition to this, it believes the operating environment remains supportive and that regulatory risk looks manageable. Another bonus could be a potential $600 million capital return from the sale of its Life Insurance business. While I'm not a big fan of Suncorp, I do think Goldman makes a fair point with this note.
Treasury Wine Estates Ltd (ASX: TWE)
Analysts at Morgan Stanley have retained their overweight rating but cut the price target on the wine company's shares to $17.00. According to the note, the broker believes that a slowdown in China is only temporary and that investors ought to look beyond the short-term weakness to the long-term opportunity. So, with its shares pulling back meaningfully in recent months and now trading cheaply in relation to its global peers, Morgan Stanley feels it could be a good time to continue picking up shares. I agree with the broker and believe Treasury Wine could be a good long-term investment.
