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:
Fortescue Metals Group Limited (ASX: FMG)
According to a note out of UBS, its analysts have retained their sell rating but increased the price target on this iron ore producer's shares to $7.20. The broker increased its price target after upgrading its iron ore forecasts and Fortescue's earnings estimates accordingly. However, it isn't enough for a change of recommendation. The broker notes that Fortescue's shares are trading at a material premium to its valuation. Fortescue's shares are up 4% to $9.07 this afternoon.
Magellan Financial Group Ltd (ASX: MFG)
A note out of Morgan Stanley reveals that its analysts have downgraded this fund manager's shares to an underweight rating from equal-weight but increased the price target on them significantly to $38.00. Whilst it has lifted its earnings and dividend estimates materially to reflect its positive performance in FY 2019, the broker believes the market's expectations are too high and fears the share price could underperform. Its analysts also warned investors that there's no guarantee that Magellan's expansion into retirement products will be a success. The Magellan share price is up 2.5% to $51.49 on Thursday.
Stockland Corporation Ltd (ASX: SGP)
Analysts at Citi have downgraded this diversified property group's shares to a sell rating from neutral and trimmed the price target on them to $3.80. According to the note, the broker believes the outlook for retail property owners is bleak and expects falling underlying retail property values to weigh heavily on Stockland's shares. The Stockland share price has sunk 4% lower to $4.25 this afternoon. Though, this is largely attributable to its shares trading ex-dividend this morning.
