It has been yet another busy week of corporate news and developments which has led to a large number of broker notes doing the rounds.
Three buy ratings that caught my eye are summarised below. Here's why brokers are bullish on these shares:
Rural Funds Group (ASX: RFF)
According to a note out of UBS, it has retained its buy rating and lifted the price target on this agriculture-focused property fund to $2.41. The broker made the move after factoring recent acquisitions into its earnings forecasts. In addition to this, the broker believes that any concerns that the drought could impact its business are unwarranted. I agree with UBS of Rural Funds and think it could be a great option for income investors.
Sonic Healthcare Limited (ASX: SHL)
Analysts at Citi have upgraded this healthcare company's shares to a buy rating with a $25.25 price target after it announced the acquisition of Aurora Diagnostics for $750 million. Although it has slight concerns over Aurora being bought from a private equity firm, Citi believes the acquisition could be transformational for its U.S. business in the future. In addition to this, it sees value in its shares at current levels. I think the acquisition was a great move, but I would argue that its shares are fully valued now at 19x earnings.
Suncorp Group Ltd (ASX: SUN)
A note out of Deutsche Bank reveals that it has retained its buy rating and $15.10 price target on the insurance giant's shares after it provided an update on its plans to sell its life insurance business to TAL Dai-ichi Life Australia for $725 million. Although Suncorp advised that it will make a non-cash $880 million loss on the sale and book $145 million against goodwill in the first half, the broker had already factored this into its forecasts. Deutsche remains bullish on Suncorp due to its strong market position and attractive valuation.
