As the year draws to a close, investors are keenly eyeing the Australian Securities Exchange (ASX) for promising opportunities. Brokers have identified three standout companies that are currently rated as buys: Orica Ltd, Coles Group Ltd, and QBE Insurance Group Ltd. This comes at a time when fluctuating share prices and market updates present lucrative prospects for discerning investors.
When multiple analysts signal a buy rating, it often indicates a compelling investment opportunity. Here, we delve into why these companies have caught the attention of market experts and what potential they hold for the future.
Orica Ltd: A Global Leader in Explosives
Orica Ltd (ASX: ORI) is recognized as the world’s largest supplier of commercial explosives and blasting systems, serving key sectors such as mining and infrastructure. According to a collation of analyst opinions by CommSec, the company currently boasts 14 buy ratings.
UBS, a prominent broker, has set a price target of $27 for Orica, forecasting an 11% increase over the next year. The firm’s recent fiscal year results highlighted operating profit growth across all segments, driven by improvements in product mix and margins.
Orica is positively leveraged to resilient global mine production activity, and supportive AN prices given relatively balanced global supply. We expect mix and margin improvements from the uptake of premium blasting solutions and technology services, and the integration of recent acquisitions, to drive a 3-year EPS CAGR of +8% (FY25-28E). We see ongoing P/E re-rate potential…
Orica’s strategic positioning in diverse markets, including Australia, Asia, and North America, enhances its resilience and growth prospects, especially as global mine production remains robust.
Coles Group Ltd: Dominance in Retail
Coles Group Ltd (ASX: COL), one of Australia’s leading supermarket chains, is drawing attention with 10 buy ratings. The company’s recent fiscal update showed a 3.9% increase in total sales, reaching $10.96 billion, surpassing UBS’s expectations.
UBS has set a price target of $25 for Coles, predicting a potential rise of over 12% within the next year. The broker emphasizes Coles’ strong performance against its rival, Woolworths Group Ltd, and highlights the benefits of its automated distribution and fulfillment centers.
We remain confident superior execution continues as COL leverages recent investments (e.g., Witron ADCs – improved availability in NSW & QLD; Ocado CFCs – drove 28% 1Q26 online growth [WOW +13%], with all missions performing well), plus ongoing promotional effectiveness (fewer, better) & sound ranging (increasingly store-led), with these both supply chain enabled.
Looking ahead, UBS forecasts a net profit of $1.25 billion for Coles in FY26, underpinned by strategic investments and operational efficiencies.
QBE Insurance Group Ltd: Stability Amidst Change
QBE Insurance Group Ltd (ASX: QBE), a significant player in the insurance sector with operations in North America, Australia, and beyond, is currently backed by nine buy ratings. UBS has set a price target of $24.15, indicating a potential 26% rise in the coming year.
Despite a softening premium rate cycle, QBE’s fiscal updates show earnings tracking in line with expectations. The company’s FY26 outlook remains robust, supported by a combined operating ratio guidance of approximately 92.5% and a return on equity outlook of 16%.
With FY26E COR [combined operating ratio] guidance of ~92.5%… supporting a ~16% ROE outlook, mid-single digit volume growth ambitions retained, investment yields stabilising and A$450m buyback announced (~1.5% shares), its FY26E earnings outlook remains well underpinned. At a 10x FY26E PE (0.54x ASX200, 18% disc to 5yr avg) we continue to see compelling value and retain a Buy rating.
QBE’s strategic initiatives, including a share buyback program, underscore its commitment to delivering shareholder value while navigating market challenges.
Looking Ahead: Investment Implications
The positive ratings for Orica, Coles, and QBE reflect a broader confidence in their respective sectors and strategic directions. For investors, these companies offer a mix of growth potential, market resilience, and strategic innovation.
As the ASX continues to offer dynamic investment opportunities, these buy-rated shares represent a promising avenue for those looking to capitalize on market trends and company strengths. Investors should, however, remain vigilant and consider broader market conditions and individual risk appetites when making investment decisions.
The coming months will be crucial in determining how these companies leverage their strategic advantages to deliver on the optimistic forecasts set by analysts.
