On Monday I looked at three shares that leading brokers have given buy ratings to this week.
Today I thought I would look at the unfortunate shares that have been given sell ratings. Three that caught my eye are as follows:
InvoCare Limited (ASX: IVC)
According to a note out of Deutsche Bank, its analysts have retained their sell rating and cut the price target on the funerals company's shares to $10.40 following a disappointing trading update on Monday. The broker appears concerned by the combination of its rising costs caused by its new strategy and sharp declines in volumes. Deutsche has suggested that the company's stretched balance sheet means that its options are limited to change things. I agree with Deutsche on InvoCare and feel it is a share to avoid at this point.
Ramsay Health Care Limited (ASX: RHC)
A note out of Goldman Sachs reveals that its analysts have retained their sell rating and $49.00 price target after its France-based subsidiary increased its offer for Swedish hospital operator Capio. While the broker sees positives in Ramsay entering new markets and fulfilling its goal of becoming a global healthcare services provider, it does have a few concerns. One of these is the acquisition potentially being a distraction for management at a time when its core Australian business is struggling. While I'm a big fan of the company, I agree with Goldman that it is a sell at this point and would only consider snapping up shares if they were closer to the $40.00 mark.
Wesfarmers Ltd (ASX: WES)
Analysts at Citi have retained their sell rating and $46.30 price target on this conglomerate's shares following the release of details around the Coles demerger. According to the note, the cash flow generated by the Coles business was not as strong as Citi had expected. Because of this, its rising capex and a high payout ratio, the broker is concerned that the Coles business will not be able to sufficiently reinvest in price or service. While I think Citi makes great points, I'm not as bearish on Wesfarmers. I would class it as a hold at this point.
