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Top brokers name 3 ASX shares to sell today

On Wednesday I looked at three shares that have found favour with top brokers and been given the coveted buy rating this week.

Not all shares are in favour with brokers, though. Three shares that have been given the unwanted sell rating this week are listed below.

Here’s why brokers are bearish on these shares:

AGL Energy Limited (ASX: AGL)

According to a note out of Morgan Stanley, it has retained its underweight rating but lifted the price target on this energy company’s shares to $20.23. Morgan Stanley remains negative on the company due to concerns that energy retailers could be targeted during the Federal Election. In addition to this, the broker has voiced its concerns over the rapid uptake of solar power in Australia. This is likely to lead to lower demand for energy during daylight hours and could be a headwind for the company in the coming years

ASX Ltd (ASX: ASX)

Analysts at Citi have retained their sell rating but lifted their price target on the Australian stock exchange operator’s shares slightly to $59.80. According to the note, the broker has lifted its price target to account for stronger than expected volumes during the first half. However, whilst this is a positive and the company has defensive qualities, the broker has held firm with its sell rating for valuation reasons. Based on Citi’s earnings per share forecast of approximately $2.50 in FY 2019, ASX’s shares are currently changing hands at 25x forward earnings.

Medibank Private Ltd (ASX: MPL)

A note out of Goldman Sachs reveals that its analysts have retained their sell rating and $2.42 price target on this private health insurer’s shares. According to the note, the broker believes that the market has yet to fully price in Labor’s 2% premium rate cap promise for health insurance premiums. In addition to this, the initial draft of APRA’s new PHI capital standard is due in the second quarter and could weigh on its shares. All in all, Goldman expects the above to be negative for its margins over the medium term.

Those may be the shares to sell, but here are the shares named as buys this month.

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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 ASX 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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