Top brokers name 3 ASX small cap shares to buy

These small cap ASX shares have been named as buys…

| More on:
A white and black clock face is shown with three hands saying Time to Buy reflecting Citi's view that it's time to buy ASX 200 banks

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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:

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.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited, Booktopia Group Limited, and SILK Laser Australia Limited. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended SILK Laser Australia Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

Two people tired and resting after sports race.
Broker Notes

Fundie rates 2 ASX 200 stocks in short-term pain but with long-term gain potential

Blackwattle Investment Partners sees these 2 ASX 200 stocks as worthy of a buy and hold strategy.

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

Guess which beaten down ASX share is rocketing 11% today

Why are investors buying this beaten down stock? Let's find out.

Read more »

Broker working with share prices on computers.
Broker Notes

These 3 ASX All Ords stocks just got sizeable broker upgrades

Top brokers expect strong performance from these ASX All Ords stocks.

Read more »

Man pointing an upward line on a bar graph symbolising a rising share price.
Broker Notes

Morgans says these ASX 200 stocks can rise 30%

Big returns could be on the cards for buyers of these shares.

Read more »

Successful group of people applauding in a business meeting and looking very happy.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A group of stockbrokers sit in a room with several computer screens in front of them as they discuss the Zip share price and Zip's merger with Sezzle
Broker Notes

Here are the latest broker rating changes on 3 prominent ASX shares

Brokers have delivered a mixed bag this week.

Read more »

Two people climb to the summit and raise their arms in success as the sun rises brightly over the mountains.
Financial Shares

'Strong momentum': 2 ASX financial shares backed by top fundie for 2025

ASX financial shares had a strong trading session on Tuesday with several new price records set.

Read more »