Yesterday I looked at a few shares that had found favour with brokers this earnings season and been given buy ratings.
Today I am looking at the shares that are out of favour and have been declared sells.
Three that caught my eye are summarised below:
Insurance Australia Group Ltd (ASX: IAG)
According to a note out of Macquarie, its analysts have retained their underperform rating and cut the price target on the insurance giant's shares to $6.55. Although the broker acknowledges that its results were solid, they came in below the market's high expectations. Furthermore, its analysts appear concerned over the lack of margin improvement in its Consumer segment despite some reasonably steep price increases. I wouldn't be a buyer at these levels either and would suggest investors hold out for an entry point that offers a more compelling risk/reward.
SEEK Limited (ASX: SEK)
Analysts at Citi have retained their sell rating and $15.00 price target on this job listings company's shares following the release of its full-year results. The broker appears concerned that the company's investment in its growth businesses might not deliver the results the market is expecting. In light of this, it suspects it could be as long as three years until SEEK delivers any significant earnings growth. I think Citi makes a great point, but I remain confident that the company's talented management team can deliver on its targets.
Wesfarmers Ltd (ASX: WES)
A note out of Morgan Stanley reveals that its analysts have retained their underweight rating but increased the price target on the conglomerate's shares to $45.00 following its full-year results release. While the result was ahead of the broker's expectations, it has pointed to the slowing growth of the Bunnings brand as a reason for investors to be cautious. Considering how important the Bunnings business will be to its overall performance when Coles is spun-off, I would agree that this is a concern. However, I wouldn't be a seller of its shares if I owned them. I would class them as a hold.
