ASX 300 shares continue to attract the attention of major brokers as we approach the end of the year.
Two names, Jumbo Interactive Ltd (ASX: JIN) and REA Group Ltd (ASX: REA), have caught upgrades from analysts today and are now rated as buys.
Meanwhile, Metcash Ltd (ASX: MTS) was rated a sell by Goldman Sachs analysts.
Here's why these shifts matter and what investors can expect from each stock, according to the experts.
ASX 300 shares upgraded to buys
In a note to clients this week, Citi upgraded online lottery ticket seller Jumbo Interactive to a buy rating with a price target of $14.70, according to The Australian.
In September, Morgans shared a similar outlook, retaining its buy rating with a price target of $16.80 apiece.
It highlighted the strong growth in Jumbo's Lottery Retailing segment, up 40% year-on-year, as a key driver behind its positive stance.
Though the company's FY25 forecast has been slightly tempered, Morgans sees long-term growth potential in Jumbo's core business.
Jumbo Interactive is rated a buy from the consensus of analyst estimates as well.
Meanwhile, JP Morgan upgraded its rating on REA Group today, raising the ASX 300 share a buy from a hold.
The broker says REA has been a dominant player in the business for online real estate classifieds for more than two decades and values the stock at $240 apiece.
Morgan Stanley also retained its buy rating on REA this month and lifted its price target to $250.
Analysts believe the market is underestimating REA's growth prospects, underscored by rising prices and yields in the real estate sector.
REA is fetching $230.13 apiece after the open on Tuesday, such that JP Morgan's and Morgan Stanley's price targets imply 9% and 4% upside potential, respectively.
Metcash cops downgrade
On the flip side, Goldman Sachs has taken a dim view of Metcash, downgrading the ASX 300 share to sell with a price target of $3.10.
This implies roughly 8% downside potential from Metcash's share price at the time of writing.
The downgrade stems from concerns over Metcash's market share erosion in its supermarket wholesale and hardware divisions.
We downgrade Metcash to Sell from Neutral, lower our 12-month target price to A$3.10/share, -8% TSR – and we cut FY25-27e EBIT by 5-6% and EPS by 3-5% given 1) Medium-term share erosion in Supermarket Wholesale 2) Eroding share in Hardware on competition 3) Inorganic growth strategy reducing ROIC and elevates risk.
Goldman Sachs pointed out that Metcash faces stiff competition, including Amazon's growing presence.
It also noted the risks of Metcash's acquisition-driven growth strategy, which could make the company more capital-intensive in the long run.
Foolish takeaway
Major brokers changed the ratings of these ASX 300 shares today. Two have enjoyed bullish upgrades. But Metcash could face some headwinds if these projections are correct. Time will tell what projections are right.
In the last 12 months, Jumbo Interactive is down 9%, whereas REA Group and Metcash are up 47% and down 8%, respectively.
