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Top brokers name 3 ASX shares to buy today

James Mickleboro

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 broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Afterpay Touch Group Ltd (ASX: APT)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $44.00 price target on this payments company’s shares following its AUSTRAC update. While Morgan Stanley notes that there was some non-compliance with anti-money laundering rules, this has since being rectified. Furthermore, it notes that the auditor does not recommend significant operating changes or penalties. I agree with Morgan Stanley and would be a buyer of Afterpay’s shares.

ELMO Software Ltd (ASX: ELO)

Another note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $9.00 price target on this HR and payroll software provider’s shares. According to the note, the broker was pleased but not surprised to see the company reiterate its FY 2020 guidance recently. ELMO expects annualised recurring revenue in the range of $61 million to $63 million and revenue of $53 million to $55 million. In addition to this, the broker has previously spoken positively about ELMO’s traction in the lower mid-market and its cross-selling success. I would have to agree with Morgan Stanley on this one as well.

Smartgroup Corporation Ltd (ASX: SIQ)

Analysts at Credit Suisse have retained their outperform rating and lifted the price target on this salary packaging company’s shares to $10.10. According to the note, the broker believes the selloff of Smartgroup’s shares following the resignation of its CEO has been an overreaction. Since the long-serving CEO announced his resignation, Smartgroup’s shares have fallen over 15%. It believes this is a buying opportunity for investors. Whilst it isn’t a company that I’m a big fan of, at 15x estimated full year earnings it does look good value.

The post Top brokers name 3 ASX shares to buy today appeared first on Motley Fool Australia.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Elmo Software. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019