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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:

ASX Ltd (ASX: ASX)

According to a note out of Morgans, its analysts have retained their reduce rating and lowered the price target on this stock exchange operator’s shares to $74.82. Morgans made the move following the release of the company’s activity statement for the month of August. The broker felt that ASX’s update was a touch weak, particularly in respect to futures. In light of this, it has reduced its earnings estimates and its valuation accordingly. The ASX share price was changing hands for $82.76 on Friday.

Fortescue Metals Group Limited (ASX: FMG)

A note out of Morgan Stanley reveals that its analysts have downgraded this iron ore producer’s shares to an underweight rating with an improved price target of $14.50. Although the broker has upgraded its iron ore price forecasts to reflect strong steel production in China, it isn’t enough to stop it downgrading its shares. Its analysts believe Fortescue’s valuation is looking stretched at the current level and the risk/reward on offer isn’t sufficient. The Fortescue share price ended the week at $17.34.

Mineral Resources Limited (ASX: MIN)

Analysts at Morgan Stanley have also downgraded this mining and mining services company’s shares to an underweight rating with an improved price target of $23.50. As with Fortescue above, the broker made the move on valuation grounds after some exceptionally strong gains in 2020 for the Mineral Resources share price. The company’s shares are up over 64% year to date thanks to its exposure to the rising iron ore price. This left them trading at $27.15 at Friday’s close.

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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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