On Monday I looked at a few shares that had found favour with brokers this week and been given buy ratings.
Today I thought I would look at the other side of the coin, at the shares which have fallen out of favour and been given sell ratings.
Three that caught my eye are listed below:
APN Outdoor Group Ltd (ASX: APO)
According to a note out of Citi, its analysts have retained their sell rating and $4.95 price target on this outdoor advertising company’s shares. Although the broker is bullish on the out of home advertising market and expects it to continue its solid growth for some time to come, it feels there are better options for investors elsewhere. Especially given the significant downside risk that APN Outdoor’s shares would face if the ACCC blocked the acquisition of it by JCDecaux. I would agree with Citi on this one and think there are better options.
Fletcher Building Limited (ASX: FBU)
Analysts at Credit Suisse have downgraded this building products company’s shares all the way down to an underperform rating from outperform with a reduced price target of NZ$6.08 (A$5.53). According to the note, the broker has confidence in its new CEO and the turnaround of its Australian business, but is a touch concerned about a slowdown in its New Zealand business. While I think Fletcher Building could turn its poor performance around, I would agree with Credit Suisse that it is better to stay on the sidelines for the time being.
SEEK Limited (ASX: SEK)
A note out of Citi reveals that its analysts have retained their sell rating and slashed the price target on the job listings company’s shares to $15.00 following yesterday’s update. According to the note, the broker believes that investors should be bracing themselves for low growth for a number of years. It does, however, recognise that there is a long-term opportunity for SEEK. But that isn’t enough for the broker to change its stance, especially given the risk that one of its key markets suffers from a cyclical downturn. While I wouldn’t necessarily be a seller of its shares, I do think they are fully valued at these levels and would hold out for a better buying opportunity.
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Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK 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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