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:
ASX Ltd (ASX: ASX)
According to a note out of UBS, its analysts have retained their sell rating but lifted the price target on the Australian stock exchange operator’s shares to $62.60. The broker believes that ASX Ltd could have a stronger second half thanks to positive equity markets and the volatility in interest rates. However, it has retained its sell rating as it expects earnings growth to slow markedly in FY 2020 and notes that its dividend yield has now narrowed to under 3%. The ASX Ltd share price is up 2.5% to $78.27 on Thursday afternoon.
City Chic Collective Ltd (ASX: CCX)
A note out of Citi reveals that its analysts have downgraded this retailer’s shares to a sell rating with an increased price target of $1.60. According to the note, the broker acknowledges that City Chic Collective, formerly known as Specialty Fashion Group, has good growth prospects, but it doesn’t believe the risk/reward on offer is sufficient at the current level. Especially given the industry it operates in and how quickly trends can change. The City Chic Collective share price is up 1.8% to $1.71 on Thursday.
Medibank Private Ltd (ASX: MPL)
Analysts at Goldman Sachs have reiterated their sell rating and $2.50 price target on this private health insurer’s shares after APRA published a speech which was delivered at the 2019 Health Insurance Summit. According to the report, Goldman notes that APRA is concerned the private health insurance industry is not addressing risks relating to affordability and policy changes and feels it needs to be more proactive. In addition to this, Goldman has concerns over recent industry data which appears to show that revenue trends are deteriorating and expects further gross margin deterioration to occur. Despite this, the Medibank share price is up 1% to $3.32 this afternoon.
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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.