On Wednesday I looked at a few shares that brokers had declared as buys this week.
Unfortunately, not all shares are in favour with brokers. Three that have been given sell ratings are listed below. Here’s why:
Commonwealth Bank of Australia (ASX: CBA)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating and cut the price target on the bank’s shares to $64.50. The broker made the move on the back of concerns over a weaker housing market, an upcoming report by the ACCC in relation to residential mortgages, and the Royal Commission. Overall, Morgan Stanley suspects that these factors could weigh on bank shares for the foreseeable future. While I wouldn’t be a seller of its shares if I owned them, I would prefer to buy CommBank’s shares at a lower price.
Ramsay Health Care Limited (ASX: RHC)
Analysts at Credit Suisse have retained their underperform rating and $47.20 price target on this private hospital operator’s shares after it increased its bid for Swedish hospital operator Capio. This offer has since been recommended by the Capio board and looks likely to go ahead. While Credit Suisse feels that this is a fair price to pay, it only sees low single-digit earnings accretion for Ramsay if the deal completes. I agree with the broker on this one and would suggest investors stay clear of the private hospital operator’s shares until its performance improves.
Shopping Centres Australasia Property Group (ASX: SCP)
A note out of the Macquarie equities desk reveals that its analysts have slapped an underperform rating and $2.28 price target on this property group’s shares. Although the Shopping Centre manager has recently upgraded its guidance following the acquisition of 10 centres from Vicinity Centres (ASX: VCX), it hasn’t been enough to offset the broker’s concerns over its Western Australian assets. Macquarie feels these assets are at risk of valuation downgrades. I think Macquarie makes a great point and investors may want to stay clear of the property group’s shares for now.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Shopping Centres Australasia Property Group. The Motley Fool Australia has recommended 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.