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:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Citi, its analysts have retained their sell rating and $12.20 price target on this infant formula and fresh milk company’s shares. According to the note, the broker is concerned that the launch of an a2 protein-only infant formula by rival Mead Johnson could be a challenge for the company. Ultimately, it expects the market to downgrade its margin expectations over the medium term to account for increasing competition and higher marketing costs. The a2 Milk Company share price is trading at $12.22 today.
Stockland Corporation Ltd (ASX: SGP)
A note out of the Macquarie equities desk reveals that its analysts have downgraded this diversified property group’s shares to an underperform rating with a $4.46 price target. According to the note, the broker made the move on valuation grounds. It believes the market has already priced in potential residential upside, leaving them overvalued today. The Stockland share price is down over 2% to $4.81 in late morning trade.
Treasury Wine Estates Ltd (ASX: TWE)
Analysts at Goldman Sachs have retained their sell rating and $14.10 price target on this wine company’s shares. According to the note, as well as a few concerns over the upcoming change of leadership, Goldman is bearish due to recent data trends. The broker notes that data trends have been unsupportive for the wine sector and are tracking modestly below its assumptions. This includes US Nielsen scan data continuing to trend below the market growth rate for its brands. Volume declines have been seen across most key brands. Furthermore, Australian alcohol export growth remains weak. The Treasury Wine share price is currently changing hands at $16.93.
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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 and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of A2 Milk. 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.