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Top brokers name 3 ASX shares to sell today

On Thursday I had a look at the latest shares to find favour with broker and be given buy ratings.

Today I thought I would once again look at the other side of the coin, at the shares that have fallen out of favour with brokers and been given sell ratings.

Here are three that brokers think you should sell:

NIB Holdings Limited (ASX: NHF)

According to a note out of UBS, its analysts have initiated coverage on this private health insurance provider with a sell rating and $5.70 price target. The broker believes that the risks that NIB is exposed to have not been priced into its shares yet, leaving them prone to reasonable downside. One of these risks is the premium its shares are trading at. The broker believes that private health insurance margins are at cyclical highs and the company will struggle to sustain net margins of 5% to 6% through to FY 2021. I’m not a fan of NIB and would suggest investors take note of what UBS is saying.

Orocobre Limited (ASX: ORE)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on the lithium miner’s shares to $4.35 from $4.55. According to the note, the broker made the move after Orocobre’s production downgrade yesterday. Due to adverse weather conditions, production in FY 2018 is expected to be 10% lower than its guidance. While I wouldn’t class it as a sell after its sizeable decline in recent weeks, it wouldn’t be my first pick in the lithium industry either after this disappointing production downgrade.

Suncorp Group Ltd (ASX: SUN)

Analysts from the equities desk of Macquarie have retained their underperform rating and cut the price target on the regional bank and insurance company’s shares to $13.15. The broker made the move after reviewing the company’s One Suncorp marketplace strategy. Although Macquarie’s analysts believe that there could be upside to earnings if it is a success, they note that the execution risk is elevated. Because of this, the broker intends to wait for proof that Suncorp can deliver on its targets before making adjustments to its earnings forecasts. I would agree with Macquarie entirely on this one. I think the new strategy is very promising, but I have been underwhelmed with the company’s performance thus far.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings 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.

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