It certainly has been a busy week filled with results, quarterlies, and funds under management updates.
Unsurprisingly, brokers have been very busy responding to the new data and have readjusted financial models and recommendations accordingly.
Three shares that have fallen from grace and been given sell ratings by top brokers are listed below. Here’s why they rate them as sells:
Bank of Queensland Limited (ASX: BOQ)
According to a note out of UBS, the broker has retained its sell rating and slashed the price target on the regional bank’s shares to $9.80 from $12.00. The broker has made the move after Bank of Queensland’s half-year result came in below expectations. Soft revenues as a result of lower lending volumes appears to be to blame. UBS doesn’t expect this situation to improve in the near term, hence its bearish view. While I didn’t think its result was spectacular, I wouldn’t go so far as to class it as a sell. Especially given that its shares are trading on low multiples, are at a 52-week low, and provide a generous dividend.
Oil Search Limited (ASX: OSH)
A note out of Citi reveals that its analysts have retained their sell rating and placed a $6.53 price target on the energy company’s shares after the release of its production update. According to the note, the cut to its production guidance for FY 2018 was not a surprise to the broker given the impact of earthquakes at its Papua New Guinea operations. In addition to this, the broker believes that Oil Search’s capital expenditure estimates are too low and could be revised upwards in the future, putting more pressure on its share price. I would agree with Citi and think investors should look elsewhere for exposure to the energy market following this downgrade.
Perpetual Limited (ASX: PPT)
Analysts at UBS have retained their sell rating and slashed the price target on the fund manager’s shares to $41.35 after its recent funds under management (FUM) update. That update revealed FUMs of $30.2 billion at the end of March, a decrease of $2.6 billion on the prior quarter. The broker suspects the underperformance of Perpetual’s Australian funds could lead to further outflows which the market has not factored in. I agree with UBS on Perpetual and think there are far better options for investors.
If those three shares are the ones to sell, then these three shares are the ones to buy.
For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..
But knowing which blue chips to buy, and when, can be fraught with danger.
The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."
Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.
The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.
Click here to claim your free report.
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 Scott Phillips.