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:
Austal Limited (ASX: ASB)
According to a note out of Citi, its analysts have retained their buy rating on this shipbuilder's shares and lifted the price target on them materially to $4.04. Its analysts believe that Austal is well-placed to deliver strong medium-term earnings growth thanks to its improved profitability. This is likely to be driven partly by improved margins in the United States and growth in Asia. I think Citi makes a very good point and Austal could be worth considering even after today's stellar share price rise.
Elders Ltd (ASX: ELD)
A note out of Morgans reveals that its analysts have upgraded this agribusiness company's shares to an add rating with an increased price target of $7.30. According to the note, the broker believes the acquisition of Australian Independent Rural Retailers is a good one and notes that its adds to its geographic footprint and gives it an expanded presence in the higher margin animal health industry. I think Morgans is spot on with this one and feel Elders is a good option for investors today.
Rio Tinto Limited (ASX: RIO)
Analysts at Citi have also retained their buy rating and $114.00 price target on this mining giant's shares following the release of its second quarter update on Tuesday. According to the note, although Rio Tinto fell short of production forecasts, this was largely expected due to recent announcements. In light of this, the broker holds firm with its rating and continues to see it as a good option for investors looking for exposure to the resources sector. I agree with Citi on Rio Tinto and feel it is one of the best options in the sector.
