On Monday I looked at three shares that had found favour with brokers this week and been given buy ratings.
Unfortunately, not all shares are in favour right now. In fact, some have fallen so far out of favour they have been given sell ratings.
Three shares that leading brokers have named as sells are listed below. Here’s why they are bearish on them:
Altura Mining Ltd (ASX: AJM)
According to a note out of the Macquarie equities desk, its analysts have retained their underperform rating and reduced the price target on this lithium miner’s shares to 19 cents. The broker has made the move due to concerns over the slower than expected ramp up of its Altura operation in Western Australia. In light of this and its shrinking cash balance, the broker believes that Altura will require a capital raising before the end of the year. This is likely to be dilutive to existing shareholders.
Newcrest Mining Limited (ASX: NCM)
Another note out of the Macquarie equities desk reveals that its analysts have held firm with their underperform rating and $16.00 price target on this gold mining giant’s shares following a tour of its Cadia operation. According to the note, the tour has highlighted that the Cadia operation faces a number of challenges. And although its performance has been improving lately, the broker is concerned that the risk is to the downside. In FY 2019 Cadia is expected to account for 800,000 to 880,000 ounces of the company’s 2.35 million to 2.6 million ounces of gold production.
Orica Ltd (ASX: ORI)
Analysts at Goldman Sachs have retained their sell rating and reduced the price target on this specialty chemicals company’s shares to $16.24 following its half year results release. According to the note, Orica’s first half profit of $324.2 million was not only 16.1% lower than the prior corresponding period, but 3.5% lower than the broker’s forecasts. While the broker believes that the worst is behind Orica now, it thinks the market has priced in a substantial earnings recovery in the near future. Goldman believes it will take longer than the market currently expects for a full recovery.
While those shares may be classed as sells, here is a top share that has been declared as a strong buy.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.