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:
Afterpay Ltd (ASX: APT)
According to a note out of UBS, its analysts have retained their sell rating but lifted the price target on this payments company's shares to $18.20. Although Afterpay delivered underlying sales in line with its expectations, it fell well short with its earnings. This was due largely to significantly higher than expected operating expenses. It believes this is a sign that the market is underestimating the level of investment the company will need to make in order to sustain its growth. The Afterpay share price finished the week at $33.17.
Costa Group Holdings Ltd (ASX: CGC)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating but lifted the price target on this horticulture company's shares to $2.78. According to the note, whilst Costa delivered on its revised guidance for its FY 2019 earnings and reiterated its FY 2020 guidance, the broker remains cautious. Especially given that management has advised that its guidance remains subject to the coronavirus outbreak not impacting its performance. The Costa share price ended the week at $2.96.
Nanosonics Ltd (ASX: NAN)
Analysts at Citi have retained their sell rating and $4.40 price target on this infection control specialist's shares following its half year results release. Although Nanosonics delivered a first half result in line with its expectations, it notes that this was due to a strong performance in North America offsetting weaker growth elsewhere. Citi also appears concerned that its new product launches have been delayed. The Nanosonics share price last traded notably higher than this price target at $6.60.
