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Leading brokers name 3 ASX shares to sell today

On Monday I looked at three shares that had been given buy ratings by brokers this week.

Unfortunately, not all shares are classed as buys right now and some have had the dreaded sell rating placed on them.

Three shares that have been rated as sells are listed below. Here’s why leading brokers think you should avoid them:

Domain Holdings Australia Ltd (ASX: DHG)

According to a note out of Citi, it has retained its sell rating and reduced the price target on this property listings company’s shares to $2.50 following its disappointing trading update. Although the broker expects Domain to have a better second-half, it doesn’t expect this to be enough to offset its rising costs and has lowered its forecasts for FY 2019 accordingly. In addition to this, it expects the upcoming Federal election to weigh on volumes in the short-term. I would agree with Citi on Domain and believe there are better options elsewhere in the industry.

Michael Hill International Ltd (ASX: MHJ)

Analysts at Morgans have downgraded this jewellery company’s shares to a reduce rating from hold and cut the price target on its shares from $1.01 to just 70 cents. The broker made the move after Michael Hill’s disastrous quarterly update revealed a disappointing start to FY 2019 after management misjudged the marketing and promotional activities required to support its strategic shift away from a reliance on discount based pricing. Morgans appear concerned at the way all territories have weakened at the same time. It is worth noting that this broker note was released prior to its 29% share price decline on Monday, which could mean that a change of rating is around the corner following its share price decline to below this price target. While I am concerned at its performance, management appears confident that it can turn things around. This could make it worth considering following the decline.

Wesfarmers Ltd (ASX: WES)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $45.00 price target on this conglomerate’s shares following the release of its Coles sales update. Although Coles delivered a better than expected sales result in the first quarter thanks to its Little Shop promotion and food inflation, the broker has held firm with its rating. It feels it is a touch too soon to be able to judge how well Coles will perform as a standalone company. While I wouldn’t necessarily be a seller of Wesfarmers’ shares, I wouldn’t be a buyer unless they pulled back to a more attractive level.

While those may be the shares to sell, this top stock has been named as the one to buy by experts.

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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 and has recommended Wesfarmers 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.

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