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Top brokers name 3 ASX shares to sell next week

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:

Fortescue Metals Group Limited (ASX: FMG)

According to a note out of Citi, its analysts have retained their sell rating and $11.70 price target on this iron ore producer’s shares following its fourth quarter update. Although the broker has upgraded its estimates to reflect Fortescue’s FY 2021 shipments guidance, it isn’t enough for a change of rating. The broker continues to believe that the market is pricing in a long term iron ore price that is unrealistic. The Fortescue share price ended the week at $17.41.

Orocobre Limited (ASX: ORE)

Analysts at Ord Minnett have downgraded this iron ore producer’s shares to a sell rating with a reduced price target of $2.00. The broker notes that Orocobre has worked very hard with its cost cutting, but this has still not been enough to offset the sharp decline in lithium prices. Ord Minnett also has concerns that costs could rise because of the pandemic. Which, given the oversupply of lithium, could mean another tough 12 months for the company in FY 2021. The Orocobre share price last traded at $2.97.

Reece Ltd (ASX: REH)

Another note out of Citi reveals that its analysts have downgraded this plumbing parts company’s shares to a sell rating with a reduced price target of $8.55. According to the note, Citi is expecting the pandemic to result in tough trading conditions that stifle Reece’s earnings growth over the next couple of years. Particularly given the weakening housing market activity and softening house prices. The Reece share price ended the week at $9.99.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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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