Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were quite bearish.
Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:
Platinum Asset Management Ltd (ASX: PTM)
According to a note out of Goldman Sachs, its analysts have retained their sell rating and $3.80 price target on this fund manager’s shares. The broker appears underwhelmed once again by Platinum’s performance during October. It notes that its solid investment performance was entirely wiped out by fund outflows of $252 million. The broker also has concerns over the underperformance of the majority of its funds. This could potentially drive further fund outflows if things don’t pick up. Platinum’s shares finished the week at $4.39.
Suncorp Group Ltd (ASX: SUN)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and $13.40 price target on this insurance giant’s shares. According to the note, the broker has concerns over changes to CTP schemes in New South Wales and Queensland. It believes changes to these schemes could negatively impact its ITR margin by upwards of 150 basis points. This could mean a cash earnings before tax hit of around $140 million. The Suncorp share price last traded at $13.34.
Xero Limited (ASX: XRO)
Analysts at Credit Suisse have retained their underperform rating but lifted the price target on this accounting software company’s shares to $55.91. According to the note, Xero’s first half result was in line with expectations. It also notes that many of its key metrics are both strong and improving. However, with its shares up materially this year, it retains its underperform rating on valuation grounds. Xero’s shares finished the week notably higher than this price target at $75.71.
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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 Xero. 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.