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.
Those were the shares to sell, but this is the share to buy according to this top analyst.
Discover why this legendary Australian stock-picker just issued a “Double Down” buy alert to his exclusive group of insiders… and why he’s convinced this might be the single most attractive entry point for years to come.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended InvoCare Limited and Ramsay Health Care 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.