3 ASX shares catching broker upgrades this week

Analysts are turning more constructive on these names.

| More on:
three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.

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

If you're building a portfolio of ASX shares, these broker recommendations may be of help in the decision-making.

Analysts have lifted ratings on three stocks in notes to clients this week: EML Payments Ltd (ASX: EML), Webjet Group Ltd (ASX: WJL), and The Lottery Corp Ltd (ASX: TLC).

Why the change of heart on these companies, you might ask? Each has its own strengths and advantages., so let's see what the experts think and what it could mean for your portfolio.

Analysts lift ratings on ASX shares

Anyone following the EML Payments story will know the company has experienced some turbulence in recent years. But its latest trading update has investors foaming at the mouth, with the stock up 27% in the past week alone.

The animal spirits of EML have awakened again, and two points from its quarterly numbers stand out: The 46% jump in pre-tax earnings and management reaffirming full-year guidance of $54 million to $60 million, where it could earn 13 cents per share by FY28.

At the ASX share's closing price of 89 cents on Tuesday, this equals a 14.7% five-year forward earnings yield.

CEO Ron Hynes laid out bold plans to streamline operations and drive "double-digit transaction revenue growth by FY27" alongside the earnings target.

Created with Highcharts 11.4.3EML Payments PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

RBC Capital Markets has slapped a buy rating on EML with a $1.20 price target following the announcement, according to The Australian. This suggests a 35% upside potential from Tuesday's closing price.

With management investing in leadership and efficiency gains, there's hope this battered ASX share could claw back some of its former glory.

Webjet takes flight

Webjet Group – which is no longer associated with Web Travel Group Ltd (ASX: WEB) – has been flying under the radar since its listing in September.

Shares are down 9% in the past week, but Jeffries sees some value in the business and has upped its rating to a buy with a $1.10 price target.

Created with Highcharts 11.4.3Webjet Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Jeffries joins the likes of Goldman Sachs, which already rated the stock a buy at the exact same valuation.

The online travel agency delivered solid half-year results, prompting both brokers to turn more constructive on its outlook.

Goldman was particularly impressed by Webjet's GoSee business, which is showing higher margins, and its improving online travel agency (OTA) run rates.

It says management's guidance for flat earnings growth in FY25 might be a bit "conservative", leaving room for upside surprises. As investors, we like surprises of this kind.

From Webjet Group's closing price of 83.5 cents on Tuesday, the $1.10 price objective implies a tidy 31.7% upside potential. For investors who are bullish on the travel sector, Webjet might just be worth a boarding pass.

Lottery Corp: A jackpot for income investors?

Finally, for those investors seeking ASX shares with more stability and dividends, Jeffries upgraded The Lottery Corp to a buy with a $5.80 price target this week.

According to CommSec, it joins the consensus rating of buy on the stock, with analysts turning more constructive after the company's annual results.

Created with Highcharts 11.4.3Lottery PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

According to Morgans, the Lottery Corp's FY24 results were "impressive", with management highlighting plans to refresh 'Saturday Lotto.'

It says the business can deliver a 4.5% free cash flow yield on its forecasts, and it looks to dividends of 19 cents per share over the coming two years.

ASX shares takeout

Brokers have turned more constructive on these ASX shares after recent updates in their investment stories.

Zooming out, markets continue to trend higher, which means finding selective opportunities like these could be of merit.

In the last 12 months, EML has fallen 19%, whereas The Lottery Corp is up 15%. Webjet Group was carved out in September and has climbed 4% since then.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments and Lottery. The Motley Fool Australia has recommended Lottery. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

A man sits thoughtfully on the couch with a laptop on his lap.
Broker Notes

Why Macquarie forecasts this ASX All Ords media company is set to surge 19%

Up 42% in 2025, here’s why this ASX All Ords media stock could keep racing higher into 2026.

Read more »

Excited couple celebrating success while looking at smartphone.
Broker Notes

Buy this ASX 200 stock for a 50% return: Bell Potter

Let's see why the broker is bullish on this name.

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

Leading broker tips 50%+ upside for IDP Education shares

The team at Macquarie thinks this beaten down stock could be a buy.

Read more »

Red buy button on an apple keyboard with a finger on it representing asx tech shares to buy today
Broker Notes

Top brokers name 3 ASX shares to buy today

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

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Broker Notes

Bell Potter names the best ASX 200 stocks to buy in June

The broker is feeling bullish on these names this month. Let's find out why.

Read more »

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

Bell Potter says this ASX 200 share can rise 25%

Let's see what the broker is saying about this stock.

Read more »

Stethoscope with a piggy bank in the middle.
Broker Notes

Australian health insurance: Does Macquarie prefer Medibank or NIB shares?

Medibank and NIB shares have both surged in 2025. Here’s what Macquarie expects now.

Read more »

Man smiling at a laptop because of a rising share price.
Broker Notes

9 ASX 200 shares just upgraded to strong buy ratings

Brokers have upgraded these shares amid expectations of price growth over the next 12 months.

Read more »