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:
Commonwealth Bank of Australia (ASX: CBA)
According to a note out of Goldman Sachs, it has retained its sell rating and $80.93 price target on this banking giant’s shares following the release of APRA’s latest data. Goldman notes that the recovery in housing approvals has not yet been reflected in credit growth. And although CBA continues to lead the majors in housing and customer deposits, it isn’t enough for it to change its rating. Its analysts appear to still believe that its shares don’t offer as much value as elsewhere in the industry. The CBA share price is trading flat at $80.76 today.
Fortescue Metals Group Limited (ASX: FMG)
A note out of Credit Suisse reveals that its analysts have downgraded this iron ore producer’s shares to an underperform rating and cut the price target on them to $7.50. According to the note, the broker made the move on valuation grounds and after revising its iron ore forecasts lower for the second half of 2020 and 2021. Interestingly on Monday, UBS also downgraded its shares to a sell rating with a $7.50 price target. Fortescue’s shares are changing hands at $8.75 today.
South32 Ltd (ASX: S32)
Equity analysts at Macquarie have retained their underperform rating and trimmed the price target on this mining giant’s shares to $2.50. According to the note, the broker remains bearish on the company due to falling manganese, alumina, and coal prices. Macquarie believes this will weigh on its earnings in the near term. The South32 share price is trading flat at $2.62 on Tuesday morning.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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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