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:
Afterpay Touch Group Ltd (ASX: APT)
According to a note out of UBS, its analysts continue to be bearish on this payments company and have retained their sell rating and $17.60 price target. The broker appears concerned by the buy now pay later platform provider’s impairment charges relative to its average gross loans. It notes that rapid loan growth can mask credit issues and believes things could get worse as it expands into lower socio-economic demographics. The Afterpay share price is up over 2% to 29.73.
Medibank Private Ltd (ASX: MPL)
A note out of Goldman Sachs reveals that its analysts have retained their sell rating and $2.68 price target on this private health insurer’s shares. According to the note, the broker believes near term catalysts are negatively skewed. It notes that the 2020 premium rate increase is likely to be revealed over the next 8 weeks. It suspects that an increase of no greater than 3% will be announced despite recent claims growth. Goldman also expects a soft half year result following those aforementioned claims growth warnings. The Medibank share price is changing hands at $3.10 today.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Analysts at Citi have retained their sell rating and $7.06 price target on this airport operator’s shares. According to the note, the broker sees a number of opportunities for the company in 2020 such as the Qantas Airways Limited (ASX: QAN) jet base lease expiry next year. However, any development would take some time to complete and then contribute to its earnings. In light of this, it retains its sell rating and believes investors have better options available to them. The Sydney Airport share price is up 1.55 to $9.02 this afternoon.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. 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.