On Monday I looked at three ASX shares that brokers have given buy ratings to this week.
Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.
Here’s why these brokers are bearish on these ASX shares:
Magellan Financial Group Ltd (ASX: MFG)
According to a note out Morgan Stanley, its analysts have retained their underweight rating and $48.00 price target on this fund manager’s shares. The broker notes that Magellan’s shares are trading at a level that makes it one of the most expensive asset managers in the world. And while there is a lot to like about the company, it isn’t enough to justify buying shares at the current level. The Magellan share price is changing hands at $54.40 this afternoon.
St Barbara Ltd (ASX: SBM)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and $3.30 price target on this gold miner’s shares. This follows an update in relation to a temporary production disruption at its Gwalia operation. Although management appears optimistic that it will catch up on its production in the second quarter, Macquarie has still reduced its forecasts slightly. Outside this, the broker has previously noted that there is a lot of near term uncertainty for the company. Following a tough few days, the St Barbara share price has dropped below this price target and down to $3.06.
Webjet Limited (ASX: WEB)
Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on this online travel agent’s shares to $3.00. According to the note, the broker believes it will be FY 2022 when Webjet is profitable again. This is due to its exposure to the leisure air travel market and the tough trading conditions it is facing. Based on Morgan Stanley’s forecasts, the company’s shares are trading at 40x FY 2022 earnings. This is even after a 5% decline in the Webjet share price to $3.62 this afternoon.
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Returns as of 6th October 2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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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