On Tuesday 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:
Fortescue Metals Group Limited (ASX: FMG)
According to a note out of UBS, its analysts have retained their sell rating but lifted the price target on this iron ore producer’s shares to $6.15 following the release of its quarterly update. Although the broker felt its production during the March quarter was strong and its realised prices were better than expected, it wasn’t enough for UBS to change its recommendation. The broker expects a ramp up in iron ore production by mining giant Vale to lead to the market normalising again over the next year or two. Fortescue’s shares last traded at $7.62.
Galaxy Resources Limited (ASX: GXY)
A note out of the Macquarie equities desk reveals that its analysts have downgraded this lithium miner’s shares to an underperform rating from neutral and slashed their price target to $1.50 following its disappointing quarterly update. According to the note, the broker is concerned with the uncertainty around its Sal de Vida asset and surprisingly weak recoveries at its Mt Cattlin operation. The Galaxy share price closed 4% lower at $1.57 on Tuesday.
National Australia Bank Ltd (ASX: NAB)
Another note out of UBS reveals that its analysts have retained their sell rating and $23.00 price target on this banking giant’s shares. According to the note, the broker believes that NAB will be forced to cut its interim dividend by 9% to 90 cents per share when it releases its half year results next week. UBS suspects that a further dividend cut could be on the horizon if the housing market downturn accelerates and the RBNZ decides to increase its capital requirements. The NAB share price is currently trading at $25.53.
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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 National Australia Bank 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.