Leading brokers name 3 ASX shares to sell today

Yesterday I had a look at a number of shares which had found favour with brokers and been given buy ratings this week.

Today I thought I would have a quick look at a few shares that haven’t fared so well and have been given the dreaded sell rating. They are as follows:

Challenger Ltd (ASX: CGF)

According to a note out of Morgan Stanley, the broker has retained its underweight rating and placed an $11.50 price target on the annuities company ahead of earnings season. The broker appears to believe that Challenger is expensive for its growth profile and I would have to agree. While I think it is a great company, I would only buy in if its shares were trading at a much lower price.

Treasury Wine Estates Ltd (ASX: TWE)

Analysts at Citi have retained their sell rating and $10.90 price target on the wine company’s shares following a review of its key markets. While demand from Asia is believed to be strong, Australian demand is thought to have declined, and US demand is predicted to have softened. As a result, Citi appears concerned that Chinese demand could be offset by weakness in other markets. However, signs of a recovery in the Americas market could change the broker’s mind. While I think that Treasury Wine Estates is a quality growth share, I wouldn’t be buying its shares so close to earnings season given the amount of growth that is priced in.

Western Areas Ltd (ASX: WSA)

A note out of CLSA reveals that its analysts have retained their sell rating on the leading nickel producer’s shares. Furthermore, the broker has a target price of $2.60 for its shares, approximately 22% lower than the current share price. CLSA believes that Western Areas’ current valuation incorporates a nickel price that is unstainable. Interestingly, Citi also slapped a sell rating on its shares this morning on valuation ground. Despite this, the nickel producer’s shares climbed almost 5% higher today.

Those shares may be classed as sells, but I think brokers would be classing these growth shares as strong buys.

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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 and has recommended Challenger Limited. The Motley Fool Australia has recommended Treasury Wine Estates 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 Bruce Jackson.

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