Many of Australia's top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.
Three buy ratings that have caught my eye are summarised below. Here's why brokers think these ASX shares are in the buy zone:
ALS Ltd (ASX: ALQ)
According to a note out of Goldman Sachs, its analysts have upgraded this testing services company's shares to a buy rating with an improved price target of $8.40. The broker believes that the correction in the company's shares following its results release in May has created a buying opportunity for investors. It notes that ALS' shares are now trading at their biggest discount to global peers in over three years and expects positive commentary at its AGM this month to drive a re-rating. I think Goldman Sachs makes a good point and ALS could be worth taking a closer look at.
Origin Energy Ltd (ASX: ORG)
A note out of Credit Suisse reveals that its analysts have upgraded this energy company's shares to an outperform rating from neutral and lifted the price target on them to $8.50. According to the note, the broker expects Origin to hit the high end of its FY 2019 guidance in August. It also believes that its margins will bottom in FY 2020, potentially making now the time to invest. Whilst I'm not a huge fan of the company, I agree that its shares look good value at the current level.
South32 Ltd (ASX: S32)
Another note out of Credit Suisse reveals that its analysts have retained their outperform rating on this mining giant's shares. The broker has, however, trimmed the price target on them to $3.70 after making adjustments to its commodity price forecasts and factoring in recent movements in the coal price. Whilst this has led to a reasonable downgrade in its earnings estimates for this year and next, it still sees enough value in South32's shares to retain its outperform rating. I agree with Credit Suisse on South32 and feel it could be a good option for investors looking for exposure to the resources sector.
