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 broker buy ratings that have caught my eye are summarised below. Here's why brokers think these ASX shares are in the buy zone:
CIMIC Group Ltd (ASX: CIM)
A note out of the Macquarie equities desk reveals that its analysts have upgraded this engineering company's shares to an outperform rating with an improved price target of $32.64. The broker appears pleased with its full year result and particularly its strong cash flow generation. It suspects that this could lead to CIMIC resuming its dividend in FY 2020. In addition to this, it notes that its shares are trading at a bigger than normal discount to the market average PE ratio. Whilst I think that Macquarie makes some good points, I'm not a buyer at this point.
IDP Education Ltd (ASX: IEL)
According to a note out of Morgans, its analysts have retained their add rating but trimmed the price target on this student placement services provider's shares to $19.56. Morgans notes that IDP Education's shares have pulled back recently due to concerns over the impact of coronavirus on its business. However, the broker believes the diversity of its earnings will allow it to mitigate any short-term impact. It also expects IDP Education to deliver another strong half year result next week. I agree with Morgans and feel that IDP Education would be a great long term option for investors.
Lovisa Holdings Ltd (ASX: LOV)
Analysts at Citi have retained their buy rating and $14.10 price target on this jewellery retailer's shares. According to the note, the broker notes that one of its main rivals in the ANZ market has just entered into administration. If Colette doesn't survive, it could allow Lovisa to win a greater share of the market and support its local earnings growth. Though, the broker continues to see its international expansion as the main driver of growth in the future. I agree with Citi and feel Lovisa could be a good option for investors.
