2 ASX shares rated as buys by many brokers

Multiple brokers like a few ASX shares at the moment, including baby and infant product retailer Baby Bunting Group Ltd (ASX:BBN).
The post 2 ASX shares rated as buys by many brokers appeared first on The Motley Fool Australia. –

ASX buy

There are a few ASX shares that many brokers like right now.

Most brokers will have a different opinion about businesses. One broker could say that Commonwealth Bank of Australia (ASX: CBA) shares are a buy whilst another broker could say that the CBA share price is a sell.

However, when multiple brokers think that an ASX share is a buy, then it could be worth paying attention.

These two ASX shares could be worth watching:

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting shares are liked by at least five brokers right now.

One of the brokers that has the most positive outlook for the Baby Bunting share price is Morgans – it has a price target of $6.39.

The broker likes Baby Bunting’s growth prospects, it thinks that the expansion to New Zealand can improve that growth even further.

In the ASX share’s half-year result, Baby Bunting reported 16.6% growth of total sales to $217.3 million. This was driven by comparable store sales increasing by 15%, or 21.8% when excluding Victorian stores.

Just like other ASX retail shares, Baby Bunting is seeing a large surge of online sales, with growth of 95.9% over the half-year – click and collect sales went up 218%.

But it wasn’t just the sales that went up, Baby Bunting’s gross profit margin improved by 41 basis points to 37.4%. Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) went up 29.7% to $18.5 million and pro forma net profit after tax (NPAT) grew 43.5% to $10.8 million and statutory NPAT jumped 54.7%.

The CEO of Baby Bunting, Matt Spencer, explained why the company’s demand had been so reliably strong:

Maternity and baby goods are essential products for parents and parents-to-be and are less discretionary in nature. Our strong comparable store and total sales growth performance demonstrates that we continue to deliver on our strategy of growing market share.

Idp Education Ltd (ASX: IEL)

IDP Education is one of the world’s leading businesses when it comes to helping international students and doing England language testing.

The ASX share is liked by at least five brokers, including UBS which has a share price target of $29.80 for IDP Education.

UBS thought the recent FY21 half-year result was good considering the environment that IDP Education is operating in right now with COVID-19 impacts. The broker thinks IDP is a great business. It pointed out that online learning was able to pick up some of the slack.

As the global economy gets back to normal and COVID-19 vaccinations are rolled out, IDP Education could recover and be in a better position.

In the FY21 half-year result, the ASX share said that international English language test volumes had rebounded to pre-pandemic levels. Despite that, English language testing revenue was down 26% to $158.3 million and total company revenue was down 29% to $269.1 million.

EBITDA fell 33% to $68 million, EBIT fell 43% to $47.3 million and net profit dropped 45% to $29.7 million.

The company said it continues to invest in its various segments.

It must be noted that earlier this week, it was announced that Education Australia was going to divest its 40% shareholding of IDP Education. There will be a distribution of 25% to all of its 38 universities, which may or may not decide to sell shares over the coming year or so. The other 15% will be sold to the market and must be done before 11 December 2021.

IDP Education said this restructuring would not impact IDP’s operations or strategy.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Idp Education Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX shares rated as buys by many brokers appeared first on The Motley Fool Australia.

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