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Top brokers name 3 ASX shares to sell next week

ASX shares to avoid

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:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $68.50 price target on this banking giant’s shares. Although the broker’s overall view of the major banks has improved, it notes that investors have driven their shares higher in recent weeks. This has particularly been the case for Commonwealth Bank, with its shares now trading well above its estimate for fair value. The broker also notes that there are limited cost reduction possibilities for the bank and also a risk from potential credit quality deterioration. The Commonwealth Bank share price ended the week at $80.00.

New Hope Corporation Limited (ASX: NHC)

A note out of Macquarie reveals that its analysts have retained their underperform rating and $1.00 price target on this coal miner’s shares. Although production at its Bengalla operation is currently in line with its expectations, the broker notes that the New Acland operation is ramping down after failing to get its expansion approval. In addition to this, the broker has concerns over potential legal issues relating to the latter mine and the outlook for thermal coal. The New Hope share price last traded at $1.18.

Oil Search Ltd (ASX: OSH)

Analysts at Credit Suisse have downgraded this energy producer’s shares to an underperform rating with a $3.10 price target. The broker made the move after Oil Search released its strategy update. It notes that this update revealed higher capital expenditure at the PNG LNG operation. In addition to this, it has been disappointed with the slow progress being made with the Alaska sell-down. The Oil Search share price was changing hands for $3.54 on Friday.

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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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