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Leading brokers name 3 ASX shares to sell today

Broker holding red flag in front of bear

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 just been given sell ratings. Here’s why they are bearish on them:

Collection House Limited (ASX: CLH)

According to a note out of Morgans, its analysts have downgraded this receivables company’s shares to a reduce rating and slashed the price target on them to $1.09. Its analysts were disappointed with Collection House’s performance in FY 2019 and note that its profits were inflated by lower amortisation. It estimates that its profits would have been down by over a third if adjusted for the same level of amortisation in FY 2018. Overall, it remains bearish on its outlook and feels there is a lot of downside risk with its shares. Collection House’s shares are trading almost 4% lower at $1.17 today.

Galaxy Resources Limited (ASX: GXY)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and cut the price target on this lithium miner’s shares to $1.10. According to the note, although Galaxy posted a small profit in the first half of FY 2019, the broker’s focus was on its significant drop in revenue from weak lithium prices. Furthermore, following the impairment of the Mt Cattlin operation, Macquarie has reduced its valuation of Galaxy’s James Bay asset, ultimately leading to a reduction in its price target. Galaxy’s shares are trading flat at $1.12 on Tuesday.

Harvey Norman Holdings Limited (ASX: HVN)

Analysts at Morgan Stanley have retained their underweight rating and $3.20 price target on this retailer’s shares following the release of its full year results. According to the note, Harvey Norman’s earnings fell short of the broker’s expectations. In light of this, it continues to remain bearish on the company and sees more value elsewhere in the industry. Harvey Norman’s shares are up over 1% to $4.48 on Tuesday.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. 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.

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