As well as covering large caps like Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS), many brokers also cover smaller companies.
In light of this, I thought I would scour through a range of recent notes to see which small cap ASX shares are in favour with brokers at present.
Three that have been given buy ratings are listed below. Here's why brokers like them:
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Adore Beauty Group Ltd (ASX: ABY)
According to a note out of UBS, its analysts have retained their buy rating and lifted their price target on this online beauty retailer's shares to $6.00. This follows the release of a solid FY 2021 result, which saw the company beat its guidance. And while UBS notes that management is investing in its growth at the expense of profit margins, it appears to believe this will be worth it in the long run. UBS continues to see Adore Beauty as well-placed to benefit from structural tailwinds. The Adore Beauty share price was trading at $4.86 on Tuesday.
Booktopia Group Ltd (ASX: BKG)
A note out of Morgans reveals that its analysts have retained their add rating and lifted their price target on this online book retailer's shares to $3.72. Morgans notes that Booktopia delivered a full year result largely in line with its expectations and ahead of its upgraded guidance. The broker sees Booktopia as well-placed to gain market share. This is thanks to its proven ability to attract and retain customers, coupled with current and future improvements to the consumer offering. In addition, Morgans sees its margin improvement in FY 2021 as a sign of things to come in the future. The Booktopia share price was fetching $2.85 on Tuesday.
Silk Laser Australia Ltd (ASX: SLA)
Analysts at Ord Minnett have retained their buy rating but trimmed their price target on this laser clinic company's shares to $4.85. According to the note, Ord Minnett was pleased to see Silk Laser deliver a full year result ahead of its upgraded guidance in FY 2021. Overall, the broker remains positive on the company's growth prospects and holds firms with its buy rating. The Silk Laser share price was trading at $3.84 on Tuesday.
