On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week. Unfortunately, not all shares are in favour with them right now.
Three that have just been given sell ratings are listed below. Here's why these brokers are bearish on them:
Australian Pharmaceutical Industries Ltd (ASX: API)
According to a note out of Credit Suisse, its analysts have retained their underperform rating and lifted the price target on this pharmacy chain operator and distributor's shares slightly to $1.45 following the release of its half year results. The result not only fell short of Credit Suisse's expectations, but its analysts felt the quality of its earnings was poor. Australian Pharmaceutical Industries shares are trading 5% lower on Thursday at $1.44.
Orocobre Limited (ASX: ORE)
Analysts at Macquarie have downgraded this lithium miner's shares to an underperform rating from neutral and trimmed the price target on them to $3.30 following its quarterly update. According to the note, whilst the broker was pleased with its production guidance, its guidance for materially lower lithium prices in the fourth quarter caught its eye. The broker appears concerned by the oversupply of lithium and the potentially negative impact that cuts to the Chinese electric vehicle subsidy could have on future demand. Orocobre's shares have fallen 5% to $3.41 this afternoon.
Tabcorp Holdings Limited (ASX: TAH)
A note out of Goldman Sachs reveals that it has a sell rating and $4.50 price target on this gaming company's shares. According to the note, while the broker acknowledges that merger synergies and robust lotteries growth gives it a positive earnings and dividend outlook, it has concerns over structural challenges in the wagering business. This is largely in relation to turnover shifting towards lower-yielding fixed-odds business. The Tabcorp share price is down 0.5% to $4.79 at the time of writing.
