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Leading brokers name 3 ASX shares to sell today

Yesterday I picked out three shares that had found favour with brokers this week and been given buy ratings.

Today I thought I would look at a few shares that have fallen out of favour and been given the dreaded sell rating.

Three that caught my eye are summarised below. Here’s why brokers think they are sells:

Beach Energy Ltd (ASX: BPT)

According to a note out of the Macquarie equities desk, its analysts have retained their underperform rating and $1.75 price target on this energy producer’s shares following its investor day. While the market has responded positively to the company’s plan to grow its production to upwards of 40 mmboe by FY 2023, the broker has warned investors that this production increase is not a certainty. This is because the production increase is reliant on exploration drilling, the bulk of which will not take place until as late as FY 2021. While I do agree with Macquarie that investors shouldn’t get ahead of themselves, I feel Beach Energy’s shares are about fair value now and would class them as a hold rather than a sell.

Westpac Banking Corp (ASX: WBC)

Analysts at UBS have retained their sell rating and reduced the price target on this banking giant’s shares to $25.00. The broker made the move after Westpac announced that its full year profit result would be reduced by $235 million following further work on addressing customer issues and from provisions related to recent litigation. The broker doesn’t believe that the provisions will stop here and expects more to surface in FY 2019. I agree with UBS that more are likely, but I still believe Westpac is closer to a buy than a sell at these levels.

Woodside Petroleum Limited (ASX: WPL)

A note out of Citi reveals that its analysts have downgraded this energy producer’s shares to a sell rating from neutral with an improved price target of $34.64. The broker has made the move largely on valuation grounds, believing that Woodside Petroleum’s shares are fully valued now by the market. In addition to this, it does have concerns that the market may not be appreciating the risks in the LNG markets and suggests investors be cautious. I would agree with Citi on this one and suggest investors wait for a decent pullback before looking to buy shares.

While those shares may be the ones to sell right now according to brokers, this is certainly the share to buy.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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.

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