Big brokers have run the ruler over the ASX 200 shares they believe have the tailwinds and fundamentals to outperform the market. These 4 ASX shares were rated as a buy or buy-equivalent on Monday 29 March.
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Amcor CDI (ASX: AMC)
Amcor is one of the world's largest flexibles packaging and rigid plastics suppliers. UBS highlights that COVID-19 has led to greater at-home consumption which is seen as a positive for consumer packaging companies such as Amcor.
The broker believes this trend will continue into the third quarter of FY21. It points to above-average volume trends supporting the company's organic growth outlook while offsetting short-term raw material headwinds.
UBS rates Amcor shares as a buy with a $16.60 target price. This represents an upside of 9.2% from Amcor's closing price of $15.20 on Monday.
Inghams Group Ltd (ASX: ING)
The Inghams share price took to a 5% dive on Monday following Jim Leighton stepping down from his role as CEO and managing director, and current non-executive director Andrew Reeves stepping up.
Citi acknowledges that a CEO departure should be treated with caution, but asserts that the calibre of Andrew Reeves as a replacement reduces the risk. The broker believes the main issue is whether or not Inghams can maintain stability in its senior management team.
Citi puts the spotlight on Ingham's Woolworth Group Ltd (ASX: WOW) contract which is currently being negotiated and notes it as a concern.
Nevertheless, the broker reiterated a buy rating but acknowledges that clarity about the company's direction under the new CEO will be needed before the stock can re-rate. A $4.40 price target was given. If Inghams meets the target price, it will return 28% based on Monday's closing price of $3.43.
Polynovo Ltd (ASX: PNV)
The Polynovo share price has started to recover from a brutal selloff in January after the company missed revenue expectations.
Ord Minnett comments on the company's purchasing agreement with Premier Inc, a major US group purchasing organisation (GPO) for the supply of NovoSorb BTM. This agreement will allow Polynovo's product to be available to over 41,000 health facilities in the United States.
The broker views this as a solid mid-to-long-term opportunity that could see additional large-scale agreements take place in the near term. It notes that the top five GPOs, of which Premier is one, provide access to around 90% of the US market.
The broker note maintained an accumulate rating and a target price upgrade from $2.55 to $3.10. This represents an upside of 11% based on Monday's closing price of $2.79.
Sonic Healthcare Limited (ASX: SHL)
Credit Suisse believes there is increasing evidence of pent-up demand for healthcare services as people delayed seeking healthcare at the beginning of the pandemic.
The broker highlights that trends across all diagnostic services improved in February relative to a weak January. Credit Suisse analysts expect above historical growth rates in 2021 as the vaccine roll-out continues, economies open-up, confidence increases and physician visits return. The continued volume of COVID-19 testing will also be a factor that underpins Sonic Healthcare's earnings.
An outperform rating was retained with a $40.00 target price. This represents an upside of 13% after its shares closed at $35.30 on Monday.
