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Leading brokers name 3 ASX shares to sell today

On Monday I looked at three shares that have found favour with brokers and been given the much-coveted buy rating.

Not all shares are in favour right now, though. The three shares listed below have just been given sell ratings. Here’s why these leading brokers are bearish on them:

ASX Ltd (ASX: ASX)

According to a note out of Goldman Sachs, it has retained its sell rating and $48.10 price target on the Australian stock exchange operator after updating its forecasts to account for recent trading activity. Year to date the broker estimates that equities value traded is up 14%, future-related volume is up 3%, and options volume traded is down 13% on the prior corresponding period. While this is broadly in line with what the broker was expecting, Goldman notes that ASX Ltd’s shares are currently trading at 25x earnings for ~5% earnings per share growth. This is at the higher end of its exchange peers and doesn’t offer enough value for the broker.

Coca-Cola Amatil Ltd (ASX: CCL)

A note out of Citi reveals that it has retained its sell rating and cut the price target on this beverage company’s shares to $8.15 following its recent update. The broker believes that Coca-Cola Amatil’s plans to simplify its Australian business and improve its brand presence in the Indonesia market will take both time and money. In light of this, Citi has reduced its earnings expectations for both FY 2019 and FY 2020. It now believes the company’s target of 5% earnings growth won’t be achieved until FY 2021 at the earliest.

Metcash Limited (ASX: MTS)

Analysts at Citi have also retained their sell rating and cut the price target on this wholesale distributor’s shares to $2.45 following the release of its half year results on Monday. According to the note, the broker felt that Metcash delivered a weak underling result with improvements in food sales largely the result of inflation. In light of this, Citi has revised its second half estimates lower. Looking ahead, the broker appears concerned that a switch to a growth strategy from a cost-reduction focused strategy will be challenging.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of ASX Limited. The Motley Fool Australia has recommended Coca-Cola Amatil 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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