A large number of broker notes have hit the wires this week, leading to many popular shares being declared buys and sells.
Three shares that are in favour with brokers and have been given a buy rating are listed below. Here's why they are bullish on them:
Australian Pharmaceutical Industries Ltd (ASX: API)
According to a note out of Citi, its analysts have initiated coverage on this pharmacy chain operator and distributor's shares with a buy rating and $1.60 price target. The broker believes that Australian Pharmaceutical Industries' shares are attractively priced in comparison to its peers. And although it doesn't expect the company to grow as strongly as it has in previous years, it believes it is well-placed for solid earnings growth thanks to its Priceline business and ClearSkinCare clinics. Whilst it wouldn't be my first choice in the retail sector, I think Citi makes some fair points.
Costa Group Holdings Ltd (ASX: CGC)
A note out of Goldman Sachs reveals that its analysts have retained their buy rating but reduced the price target on this horticulture company's shares by 23% to $4.40 following its guidance downgrade on Thursday. According to the note, the broker believes that Costa's issues are temporary and not structural. In light of this, Goldman remains confident in the long term growth outlook and expects its shares to re-rate if it delivers on its guidance and successfully executes its medium term capex growth program. I agree with Goldman and feel Costa's shares could be a good long-term option.
Telstra Corporation Ltd (ASX: TLS)
Analysts at Deutsche Bank have retained their buy rating and lifted the price target on this telco giant's shares to $3.80 following its T22 update. According to the note, the broker was pleased with the progress Telstra has made and the fact that it reiterated its guidance for FY 2019. Earlier this month Deutsche suggested Telstra would benefit from the ACCC's decision on the TPG-Vodafone Australia merger and expects it to further entrench its first mover advantage in 5G. I agree with Deutsche on Telstra and would also class its shares as a buy.
