On Monday I looked at three ASX shares that have been given buy ratings by leading brokers this week.
Unfortunately, not all shares are in favour with brokers right now. The three shares listed below have all been given the dreaded sell rating. Here’s why:
Bank of Queensland Limited (ASX: BOQ)
Analysts at Goldman Sachs have retained their sell rating and $9.09 price target on this regional bank’s shares following the release of its half year results. According to the note, with mortgage competition unlikely to ease, the broker believes the near term outlook for regional bank margins remains tough. Overall, the broker believes more value can be found elsewhere in the banking sector. Bank of Queensland’s shares are currently changing hands at $8.93.
Medibank Private Ltd (ASX: MPL)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating but increased the price target on this private health insurer’s shares to $2.40. The broker believes investors should stay clear of Medibank Private due to concerns over a large number of disruptions facing the private health insurance industry in the near term. This includes the highly likely cap on premium increases and major product reforms. The Medibank Private share price is currently trading 1.5% higher at $2.71.
Pendal Group Ltd (ASX: PDL)
A note out of UBS reveals that its analysts have downgraded this fund manager’s shares to a sell rating with reduced price target of $8.70. According to the note, after six straight quarters of net outflows for its key JO Hambro business, the broker believes the business looks increasingly challenged and could weigh on Pendal’s funds flows and performance fees. As a result, the broker has trimmed its earnings and dividend forecasts accordingly. The Pendal share price is currently trading at $8.59.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.