Leading brokers name 3 ASX shares to sell

With earnings season on the horizon and quarterly reports flooding in, brokers up and down Australia have been extremely busy this week.

Three shares which haven’t fared well with brokers are listed below. Here’s why they have been given sell ratings:

Newcrest Mining Limited (ASX: NCM)

According to a note out of UBS, its analysts have retained their sell rating and $13.40 price target on the gold miner following the release of its quarterly update yesterday. The broker appears to be concerned about Newcrest’s production post-2020 when it is expected to decline rapidly. Considering this risk, I would have to agree with UBS that Newcrest’s shares are expensive. Furthermore, as I’m bearish on the gold price moving forward, I think Newcrest could come under significant selling pressure later this year.

QBE Insurance Group Ltd (ASX: QBE)

A note out of Deutsche Bank reveals that its analysts have retained their sell rating and $10.00 price target on the insurance giant’s shares despite its new CEO wiping the slate clean recently with a profit warning. The broker stated its belief that QBE Insurance has an overly complex business and has consistently under delivered relative to its cost of equity. I would have to side with Deutsche on this one. I’ve been constantly underwhelmed by the insurer’s performance and don’t expect much to change in the coming years.

Sandfire Resources NL (ASX: SFR)

Analysts at Citi have downgraded the copper producer to a sell rating from neutral and cut the price target on its shares to $6.80. According to the note, although Citi felt the latest quarter was a solid one, it is concerned that the market has priced in too much success with its exploration activities. I think Citi makes a fair point. While I have confidence in Sandfire’s exploration capabilities, there is downside risk to its share price if it disappoints.

While they may be classed as sells, I think these top blue chip shares ought to be classed 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 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.

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