On Wednesday I wrote about three shares that top brokers had given buy ratings to this week.
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.
Three that caught my eye are listed below:
Brambles Limited (ASX: BXB)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating but lifted the price target on this supply chain logistics company's shares to $9.50. While the broker remains optimistic on improvements across its business, it expects the U.S. operation to continue to weigh on its performance. Given the size and importance of its U.S. business, I would suggest investors stay clear of Brambles until there are signs of improvement there.
Telstra Corporation Ltd (ASX: TLS)
Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating but slashed the price target on this telco giant's shares from $3.00 down to $2.60. According to the note, the broker believes the market is expecting too much from the telco sector over the coming years and suspects that the major players will fall short of expectations. Further, the broker has forecast an 18 cents per share dividend next year for Telstra, down from 22 cents this year. I would have to agree with Morgan Stanley on this one and think Telstra is best avoided for the time being.
Treasury Wine Estates Ltd (ASX: TWE)
Analysts at Credit Suisse have downgraded the shares of this global wine company to an underperform rating with a $15.65 price target. According to the note, the broker has made the move largely on valuation grounds after a strong share price performance. In addition to this, the broker appears a little concerned that sales in the U.S may underwhelm despite the launch of a new distribution model. While I wouldn't sell all my shares if I were a shareholder, taking a little bit of profit off the table could be prudent ahead of earnings season.
