On Wednesday I looked at three ASX shares that brokers had given buy ratings to this week.
Today I thought I would follow this up by looking at a few shares that have been given the dreaded sell rating by brokers.
Three that caught my eye are summarised below. Here's why brokers are bearish on them:
Bendigo and Adelaide Bank Ltd (ASX: BEN)
According to a note out of Deutsche Bank, its analysts have downgraded this regional bank's shares to a sell rating and cut the price target on them to $9.50. The broker appears to be concerned with the bank's exposure to mortgages. It estimates that they account for approximately 71% of its loan book at present. As a result, it is expecting a significant increase in impairments in FY 2019. In addition to this, the broker believes that the bank's Homesafe business could be struggling and may reverse revaluation gains due to falling house prices.
Commonwealth Bank of Australia (ASX: CBA)
Another bank that has been rated as a sell is Commonwealth Bank. A note out of Morgan Stanley reveals that it has retained its underweight rating and $64.50 price target on the banking giant's shares after its advised that it would include additional insurance recoveries and remediation costs in its first half result. The broker has been bearish on the bank for over two years due to concerns over the structural headwinds it faces and appears to see no reason to change its rating in the near term.
St Barbara Ltd (ASX: SBM)
Analysts at Credit Suisse have downgraded this gold miner's shares to an underperform rating with a $3.90 price target. Although the broker is impressed with St Barbara and believes that its operations are performing extremely well, it has decided to downgrade them to an underperform rating for valuation reasons. At the current level the broker believes its shares are fully priced.
