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:
Coles Group Ltd (ASX: COL)
According to a note out of Morgan Stanley, its analysts have downgraded this supermarket giant's shares to an underperform rating but lifted the price target on them to $13.50. The broker made the move largely on valuation grounds after a strong share price gain over the last 12 months. In addition to this, the broker notes that rival Woolworths Group Ltd (ASX: WOW) has a margin advantage and doesn't expect this to change in the medium term due to its scale advantage. The Coles share price is up 2% to $15.80 today.
Sandfire Resources NL (ASX: SFR)
A note out of Goldman Sachs reveals that its analysts have downgraded this copper producer's shares to a sell rating with a $5.20 price target. According to the note, the broker is bullish on the copper price in 2020, but negative on Sandfire Resources. This follows the broker's reduction in Sandfire Resources' net asset valuation due to concerns over its development projects. Goldman has looked over them and believes they will generate low returns. Its shares are down 0.5% to $5.95 in late morning trade.
Wesfarmers Ltd (ASX: WES)
Analysts at Credit Suisse have retained their underperform rating but lifted the price target on this conglomerate's shares slightly to $32.51. According to the note, the broker has reduced its forecasts for Wesfarmers' safety and industrial segment. And while it expects the key Bunnings, Kmart, and Target businesses to deliver positive comparable store sales growth in the first half, it isn't enough to warrant a change in recommendation. The broker appears concerned by its valuation, which it feels is more fitting of a growth share. The Wesfarmers share price is down 0.5% to $43.36 on Tuesday.
