Leading brokers name 3 ASX shares to sell today

On Monday I looked at three shares that brokers have given buy ratings to this week.

Today I thought I would look at the shares that have fallen out of favour and been given sell ratings.

Three that caught my eye are listed below. Here’s why brokers have slapped sell ratings on them:

Elders Ltd (ASX: ELD)

According to a note out of Morgans, it has downgraded this agribusiness company’s shares to a reduce rating with a $7.80 price target following the release of its full year results on Monday. Although Elders’ full year profit came in ahead of the broker’s expectations despite the negative impacts of the drought and falling cattle prices, Morgans has downgraded its shares for valuation reasons. At 13x estimated FY 2019 earnings, the broker believes its shares are fully valued now.

Platinum Asset Management Limited (ASX: PTM)

Analysts at Credit Suisse have downgraded this fund manager’s shares to an underperform rating from neutral and cut the price target on them to $5.00. According to the note, the broker made the move after Platinum reported a 5.5% decline in funds under management to $24,679.8 million due to negative market movements. Credit Suisse has adjusted its FY 2019 and medium term growth expectations on the belief that the poor performance could impact fund inflows.

Woolworths Group Ltd (ASX: WOW)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $23.00 price target after the conglomerate announced the sale of its petrol business to UK-based EG Group for $1.7 billion. According to the note, the broker believes that Woolworths could lose up to $170 million in operating earnings after the sale due partly to the costs associated with funding the future 4 cents per litre discount. As a result, Morgan Stanley expects the sale to be approximately 3.5% dilutive to the company’s earnings per share in FY 2019. One positive, though, is that Woolworths’ sizeable amount of franking credits means it is quite likely that the company will put them to use through capital management initiatives, according to the broker.

While those shares may have been labelled as sells, these are the shares that have been tipped as buys.

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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. The Motley Fool Australia has recommended Elders 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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