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:
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A2 Milk Company Ltd (ASX: A2M)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating and NZ$13.50 (A$12.51) price target on this infant formula company's shares following its trading update. The broker estimates that a2 Milk Company's daigou sales are down 75% compared to the prior corresponding period. And while its Chinese label sales have been stronger than the broker expected, it isn't enough for positive sales growth in the first half. In light of this, Morgan Stanley doesn't appear to be in a rush to change its rating. The a2 Milk share price is trading at A$14.67 this afternoon.
DEXUS Property Group (ASX: DXS)
Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $8.15 price target on this property company's shares. It believes DEXUS could have a very tough 12 months due to weakness in the Australian office market. Outside this, the broker has suggested that a large scale share buyback is unlikely at the current level. It feels its shares would have to fall further before management would consider one. The DEXUS share price is fetching $8.99 on Tuesday.
Zip Co Ltd (ASX: Z1P)
Analysts at Citi have retained their sell rating and $6.70 price target on this buy now pay later provider's shares. According to the note, one of the company's biggest U.S. customers, Hoka One, has ditched Zip's QuadPay business in favour of Afterpay Ltd (ASX: APT). It believes this is a sign of increasing competition in the lucrative market. And that's before PayPal enters it with its BNPL offering. The Zip share price is trading below this price target at $6.38 this afternoon.
