Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were 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:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating and NZ$12.50 (A$11.82) price target on this infant formula and fresh milk company's shares. The broker believes its strong share price gains this year indicates that the market is pricing in an upgrade to the company's earnings guidance. It appears concerned that one might not come and lead to its shares tumbling lower. The a2 Milk Company share price ended the week at an all-time high of $19.00.
ResMed Inc. (ASX: RMD)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating but increased the price target on this medical device company's shares to $18.60. Although ResMed is benefiting from increasing ventilator sales because of the pandemic, the broker suspects that this could be offset by a decline in new sleep apnoea patients and ultimately sleep treatment product sales. In light of this, it believes the risk is to the downside for earnings estimates. ResMed's shares ended the week changing hands for $25.67.
Westpac Banking Corp (ASX: WBC)
Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $17.20 price target on this banking giant's shares. According to the note, the broker expects Westpac to make a significant cut to its dividends in the near term. It has forecast a cut to 80 cents per share in FY 2020 and then up slightly to 90 cents per share in FY 2021. This equates to fully franked yield of 5% and 5.7%, respectively. The Westpac share price ended the week at $15.87.
