On Tuesday 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:
Downer EDI Limited (ASX: DOW)
A note out of Credit Suisse reveals that its analysts have downgraded this services company’s shares to an underperform rating and cut the price target on them to $7.00 following last week’s update. That update revealed that issues with its ECM business meant the company was going to fall well short of its FY 2020 guidance. Instead of $365 million, management advised that it now expects its NPATA to be $300 million. This represents a decline of 12% year on year. The Downer share price is trading at $7.27 on Wednesday.
Syrah Resources Ltd (ASX: SYR)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and 35 cents price target on this graphite producer’s shares. According to the note, Macquarie acknowledges that Syrah’s reduction in production has helped to stabilise graphite prices late in 2019. However, it appears to be struggling to see how Syrah will be able to return to full production without putting downward pressure on prices again. The Syrah share price is changing hands at 52 cents on Wednesday.
Webjet Limited (ASX: WEB)
According to a note out of Morgan Stanley, its analysts have downgraded this online travel agent’s shares to an underweight rating and slashed the price target on them by almost 20% to $10.00. The broker made the move after some of its rivals revealed that Google Travel was negatively impacting their businesses. The broker suspects that the same could be happening to Webjet’s B2C business. This could mean Webjet will need to increase its marketing costs and give away margin to compete successfully with the tech giant. The Webjet share price fell heavily on Tuesday following the downgrade and is rebounding slightly today. Its shares are trading at $12.75 at the time of writing.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. 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.