Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.
Here's why brokers think investors ought to buy them next week:
IOOF Holdings Limited (ASX: IFL)
According to a note out of Credit Suisse, its analysts have upgraded this financial services company's shares to an outperform rating and lifted the price target on them materially to $8.45. Credit Suisse made the move after IOOF agreed a lower acquisition price of $825 million for the ANZ Wealth Pension & Investments business. It also notes that APRA will not be appealing IOOF's recent court victory. Whilst I think things are looking better for IOOF, I'd like to see trading conditions improve before considering an investment.
Opthea Ltd (ASX: OPT)
A note out of Goldman Sachs reveals that its analysts have reiterated their conviction buy rating and lifted the price target on this biotech company's shares to $5.20. According to the note, recent events mean the broker sees a clearer path to a favourable Phase III outcome and ultimately a greater chance of approval for its promising OPT-302 product. This product is a combination therapy for treatment-naïve patients with wet age-related macular degeneration (AMD). Goldman believes it has a ~US$10 billion market opportunity. Whilst it is a high risk option, I believe it is worth considering a small investment in its shares.
Rio Tinto Limited (ASX: RIO)
Analysts at Macquarie have retained their outperform rating but trimmed the price target on this mining giant's shares slightly to $105.00. According to the note, the broker is now more confident in the Oyu Tolgoi operation following a site visit. In addition to this, Macquarie was pleased with Rio Tinto's iron ore and copper production during the first quarter. It notes that if iron ore prices stay at current levels next year, it would make large upgrades to its earnings forecasts. I agree with Macquarie and believe it is a great option in the resources sector.
