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:
Commonwealth Bank of Australia (ASX: CBA)
According to a note out of Goldman Sachs, its analysts have retained their sell rating but lifted their price target on this bank’s shares slightly to $56.40. Goldman notes that Commonwealth Bank’s third quarter cash earnings of $1.3 billion is running well short of its second half expectations because of provisions. In light of this and its weakening balance sheet, the broker sees little reason that its shares should trade at such a premium to its peers and has reiterated its sell rating. The Commonwealth Bank share price ended the week at $59.60.
Stockland Corporation Ltd (ASX: SGP)
A note out of Citi reveals that its analysts have retained their sell rating on this property company’s shares. According to the note, the broker is concerned that its key residential and retail segments are facing headwinds from the pandemic. It notes that Stockland’s residential segment has seen a sharp decline in deposits and its retail portfolio is experiencing speciality sales declines. The Stockland share price was trading at $2.70 on Friday.
Xero Limited (ASX: XRO)
Analysts at UBS have retained their sell rating and lowly $58.50 price target on this business and accounting software provider’s shares. According to the note, Xero’s maiden profit in FY 2020 fell short of its expectations. In addition to this, while it feels its growth strategy is sound, it believes there is uncertainty around its short term prospects. Furthermore, it feels the risk/reward on offer on a long term basis is unfavourable at these levels. Xero’s shares ended the week at $75.32.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has no position in any of the stocks mentioned. 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.
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