On Thursday I took a look at a number of shares which have found favour with brokers during earnings season and subsequently been given buy ratings.
Today I thought I would take a quick look at three shares which haven’t impressed brokers and as a result have had the dreaded sell rating placed on them.
Here they are:
Iluka Resources Limited (ASX: ILU)
According to a note out of Deutsche Bank, its analysts have retained their sell rating and reduced the price target on the mineral sands company’s shares to $6.50. Its analysts appear to be disappointed that its first-half results came in below expectations and by delays at its Cataby project. I can’t say I was overly impressed with its first-half results either. Iluka posted a loss after tax of $81.5 million for the six months ending June 30 due largely to an impairment of the Hamilton mineral separation plant.
Sonic Healthcare Limited (ASX: SHL)
Credit Suisse has downgraded this leading healthcare company to an underperform rating and cut its price target to $22.40 following the release of its full-year results. According to the note, Sonic’s result fell short of the investment bank’s forecasts. Furthermore, the broker appears to believe the healthcare company is reliant on acquisitions to fuel its growth in FY 2018, rather than being able to grow organically. I would agree with Credit Suisse on this one. I felt the result was a weak one and that there are better options in the industry at present.
Treasury Wine Estates Ltd (ASX: TWE)
A note out of Citi reveals that its analysts have retained their sell rating and $10.50 price target on the wine company’s shares after it released its full-year results. Citi seems to be concerned by Treasury Wine’s forecast for falling margins in the Asia segment in FY 2018. Whilst I thought the company delivered another impressive result, I am a touch concerned that it won’t be able to grow earnings at a strong enough rate to justify the significant premium its shares trade at. For this reason I would suggest investors hold off an investment and wait for a better entry point.
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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Bruce Jackson.