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:
Domino’s Pizza Enterprises Ltd (ASX: DMP)
According to a note out of Morgans, its analysts have retained their reduce rating but lifted the price target on this pizza chain operator’s shares to $57.61. The broker was pleased with its performance in the first half of FY 2020 and notes that the return of the $5 value range helped drive strong same store sales growth. And while it likes its defensive qualities and positive growth profile, its current valuation appears to be a problem for Morgans. As a result, it has retained its reduce rating. The Domino’s share price ended the week at $62.78.
Medibank Private Ltd (ASX: MPL)
A note out of Credit Suisse reveals that its analysts have retained their underperform rating and reduced the price target on this private health insurer’s shares to $2.80. According to the note, Medibank’s half year result fell short of the broker’s estimates despite its solid reduction in management expenses. It remains reasonably bearish on its prospects, but acknowledges that government action in the industry could change that, depending on what action is taken. The Medibank share price last traded at $2.91.
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 $6.83. According to the note, Sydney Airport delivered a FY 2019 result that was in line with expectations thanks to better than expected cost controls. However, it notes that management did not provided any guidance for its dividends in FY 2020. Combined with the current coronavirus situation, it suspects that its dividend growth could be under pressure. The Sydney Airport share price closed the week at $8.39.
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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 and has recommended Sydney Airport Holdings Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises 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.