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:
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Fortescue Metals Group Limited (ASX: FMG)
According to a note out of Credit Suisse, its analysts have downgraded this iron ore producer's shares to an underperform rating with an increased price target of $15.00. Although the broker was pleased with Fortescue's performance in FY 2020 and its dividend was greater than expected, it isn't enough to stop it from downgrading its shares. The broker believes its shares are expensive, especially given its belief that the iron ore price could be close to reaching a top. This could ultimately mean that its earnings will soon peak. The Fortescue share price was changing hands for $18.87 on Friday.
Galaxy Resources Limited (ASX: GXY)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and 40 cents price target on this lithium miner's shares. According to the note, the broker believes that an oversupply of lithium will keep prices lower for some time to come. This is likely to weigh heavily on its performance until there is a recovery in prices, potentially in FY 2023. The Galaxy share price closed the week at $1.20.
Zip Co Ltd (ASX: Z1P)
Analysts at UBS have retained their sell rating and $5.70 price target on this buy now pay later provider's shares. This follows the release of an update on the performance of its soon to be acquired QuadPay business. While the broker appears pleased to have seen a return to growth in July for QuadPay, it isn't enough for a change of rating. UBS has previously suggested that the risk/reward on offer with its shares was unfavourable following a rally in its share price. The Zip Co share price last traded at $8.88.
