Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were quite bearish.
Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $10.80 price target on this infant formula and fresh milk company’s shares. The broker notes that data is pointing to a strong September and October for its infant formula sales. However, it remains cautious on its second half and continues to forecast a sharp slowdown in Chinese label sales during the half. The a2 Milk Company share price last traded at $14.54, materially higher than Morgan Stanley’s price target.
Magellan Financial Group Ltd (ASX: MFG)
Analysts at Goldman Sachs have retained their sell rating and $40.69 price target on this fund manager’s shares following its November FUM update. According to the note, although Magellan’s FUM are tracking ahead of its estimates for the first half, it believes there is a risk to its performance fees following a mildly negative relative performance for most key global equities products. In addition to this, it feels its shares are expensive at 24x estimated full year earnings. Magellan’s shares were changing hands at $52.34 on Friday
Metcash Limited (ASX: MTS)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and cut the price target on its shares to $2.65. According to the note, Metcash delivered a half year result that was in line with its estimates. However, it notes that its hardware business is struggling with headwinds that it expects to persist into 2021. The Metcash share price finished the week at $2.77.
The post Top brokers name 3 ASX shares to sell next week appeared first on Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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