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Top brokers say you should sell these ASX shares

James Mickleboro

On Wednesday I looked at three shares that top brokers had named as buys this week.

Today I thought I would look at the shares that have fallen out of favour and been given sell ratings.

Two that caught my eye are listed below. Here’s why brokers think you should avoid them:

Myer Holdings Ltd (ASX: MYR)

A note out of Credit Suisse reveals that its analysts have retained their underperform rating and lifted the price target on the retailer’s shares to 31 cents following the release of its full year results. The broker appears pleased that Myer has been able to refinance its bank facility allowing management to attempt to remove unprofitable sales from its mix and improve its margins. However, the broker appears unconvinced that Myer will be able to execute this successfully and has held firm with its underperform rating. I agree with Credit Suisse on Myer and think investors ought to stay clear and wait for its performance to improve.

National Australia Bank Ltd (ASX: NAB)

Analysts at Morgan Stanley have retained their underweight rating and $26.40 price target on this banking giant’s shares after it held firm with its variable home loan rates. The broker doesn’t believe that keeping its rates on hold will lead to a material lift in new home loans, though it does expect it to reduce the risk of customer churn. Morgan Stanley has forecast a dividend cut to 174 cents per share in FY 2019 from 198 cents per share for the last three years. While I don’t think I’d be a seller if I owned its shares, I wouldn’t be a buyer at his point. I believe many of its peers such as Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) are trading at more attractive prices and have secure dividends.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of National Australia Bank Limited. 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.