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:
Fortescue Metals Group Limited (ASX: FMG)
A note out of UBS reveals that its analysts have retained their sell rating but lifted the price target on this iron ore producer's shares to $8.40. According to the note, the broker has pointed out that China consumes significantly more iron ore than it did during the 2003 SARS outbreak. In light of this, it has concerns that if coronavirus negatively impacts the Chinese economy, it could have a material impact on iron ore demand and therefore prices. The Fortescue share price ended the week at $11.39.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Analysts at Citi have retained their sell rating and cut the price target on this airport operator's shares to $6.94. According to the note, the broker believes the outbreak of the coronavirus just ahead of the Lunar New Year could have a big impact on international passenger numbers passing through Sydney Airport. The broker believes upwards of a quarter of all Chinese visits to Sydney take place in February and March. In light of this, Citi has downgraded its earnings estimates for FY 2020 to reflect this. The Sydney Airport share price last traded at $8.39.
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 cut the price target on them to $10.00. The broker made the move after some of its U.S. peers revealed that Google Flights was negatively impacting their businesses. Morgan Stanley 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 ended the week at $11.75. *It is worth noting that the company has since refuted Morgan Stanley's claims.
