Many of Australia's top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.
Three buy ratings that have caught my eye are summarised below. Here's why brokers think these ASX shares are in the buy zone:
Fortescue Metals Group Limited (ASX: FMG)
According to a note out of Credit Suisse, its analysts have upgraded this iron ore producer's shares to an outperform rating with an increased price target of $8.20. The broker made the move after lifting its iron ore price forecasts considerably over the next couple of years. The broker also appears pleased at the company's decision to declare a 60 cents per share dividend this week given the potential changes to franking credits following the upcoming Federal election. Whilst I am a fan of Fortescue, I would prefer to gain exposure to iron ore through a more diversified miner.
IDP Education Ltd (ASX: IEL)
A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted the price target on this international student placement services company's shares to $17.50. According to the note, the broker believes IDP Education's digital strategy could disrupt the global student recruitment market and drive strong long term growth. This has yet to be reflected in its share price according to Macquarie, potentially making now an opportune time to snap up shares. I agree with Macquarie on IDP Education and think it would be a great long-term investment.
Reliance Worldwide Corporation Ltd (ASX: RWC)
Another note out of Credit Suisse reveals that its analysts have retained their outperform rating on this plumbing parts company, albeit with a trimmed price target of $4.40. According to the note, the broker remains positive on the outlook for Reliance Worldwide despite this week's earnings downgrade, which it estimates to be partly down to non-recurring items. Whilst the company's update was very disappointing, I do see a lot of value in its shares at this level and would agree with Credit Suisse that it is a buy.
