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Top brokers name 3 ASX shares to sell today

On Thursday I looked at three top shares that brokers had given buy ratings to this week.

Today I thought I would look at the other side of the coin and see which shares have been recommended as sells by brokers.

Three that caught my eye are listed below:

ASX Ltd (ASX: ASX)

According to a note out of Deutsche Bank, it has downgraded the Australian stock exchange operator’s shares to a sell rating from hold with a price target of $55.90. Deutsche made the move on valuation grounds. It appears the broker was holding out for a stronger update from ASX Ltd this week that could have justified the premium. I would agree with Deutsche on this one. At 25x estimated full-year earnings I feel ASX Ltd’s shares are fully valued now.

InvoCare Limited (ASX: IVC)

Another note out of Deutsche Bank reveals that its analysts have retained their sell rating and reduced the price target on this funerals company’s shares to $10.80. According to the note, the broker is concerned that InvoCare’s latest update could be a sign of market share losses and a weakening local market. I would have to agree with Deutsche Bank once again. With operating earnings per share expected to decline in FY 2018, I think 21x estimated forward earnings makes InvoCare overvalued even when accounting for its defensive qualities.

Woolworths Group Ltd (ASX: WOW)

Analysts on the Macquarie equities desk have retained their underperform rating and $26.16 price target on this retail conglomerate’s shares after its recent sales update. Although the broker noted the continued outperformance of its supermarkets, it has pointed out that the trend is slowing. Overall, there doesn’t appear to have been enough good news to warrant a change of rating at this stage. While I’m not a huge fan of Woolworths, I wouldn’t be a seller if I owned its shares. I would class it as a hold right now and could be tempted to invest if its shares came back a touch.

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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 ASX 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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