Brokers up and down Australia have been busy taking in new data and adjusting their discounted cash flow models accordingly.
While some shares have come out of this favourably, others have come out with sell ratings. Here are three shares which leading brokers think you should sell today:
GUD Holdings Limited (ASX: GUD)
A research note out of Citi reveals that its analysts have reiterated their sell rating and $11.44 price target on the retailer's shares following its decision to offload its struggling Dexion business to Tech-Link Storage Engineering for approximately $7.5 million. This was significantly less than what Citi had anticipated. Considering the Dexion business provided 27% of GUD's half-year revenue, I would have to agree with Citi that this looks cheap. With GUD's shares up 15% year-to-date and changing hands at 18x trailing earnings, I think they are a touch expensive now and best avoided.
Healthscope Ltd (ASX: HSO)
Credit Suisse has downgraded the private hospital operator to an underperform rating and reduced its target price to $2.10. With industry volume growth running below its long-term average and an unfavourable shift from overnight stays to day surgeries impacting the industry, Credit Suisse has downgraded its full-year profit growth forecast for Healthscope. Rival Ramsay Health Care Limited (ASX: RHC) is also expected to be impacted, but has only been downgraded to a neutral rating. If this proves to be the case then I think Healthscope could be one to avoid.
Suncorp Group Ltd (ASX: SUN)
A note out of Morgan Stanley reveals that it has reiterated its underweight rating and $12.00 price target on this leading insurer's shares. Whilst its analysts acknowledge that the One Suncorp strategy could provide meaningful upside, until there is hard evidence that the strategy is working they plan to keep a safe distance. I'm very optimistic on the strategy and cautiously expect positive news from the insurer later this week. Suncorp will hold its investor day on Thursday.
