On Wednesday I looked at three shares that have found favour with top brokers and been given the coveted buy rating this week.
Unfortunately, not all shares are in favour with brokers.
Three shares that have been given the unwanted sell rating this week are listed below. Here's why brokers are bearish on these shares:
Australian Pharmaceutical Industries Ltd (ASX: API)
According to a note out of Credit Suisse, its analysts have retained their underperform rating and cut the price target on the pharmacy chain operator and distributor's shares to $1.42. The broker made the move after downgrading its earnings estimates following Australian Pharmaceutical's update at its annual general meeting on Wednesday. In addition to this, although the company advised that it expects Sigma Healthcare Ltd (ASX: SIG) to commence its due diligence very soon, the broker doesn't believe investors should get excited and feels there's a strong chance that the ACCC will block the merger.
Northern Star Resources Ltd (ASX: NST)
Analysts at Deutsche Bank have retained their sell rating and $7.25 price target on this gold miner's shares following its December quarter update. According to the note, Northern Star's production for the quarter was below the broker's expectations due partly to lower grades mined. In addition to this, Deutsche notes that its cost guidance for the full year has increased. As a result of this and lower production estimates, its analysts have cut their earnings estimates for this year.
ResMed Inc. (ASX: RMD)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating but lifted the price target on this sleep treatment-focused medical device company's shares to $14.15 ahead of its second quarter results release tonight. According to the note, the broker believes that ResMed's shares are overvalued based on historical averages and in comparison to its medical device peers. ResMed's shares are currently trading at ~33x estimated full year earnings based on Macquarie's forecasts.
