On Wednesday 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 ASX shares that have just been given sell ratings by brokers are listed below.
Here's why these brokers are bearish on them:
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Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
According to a note out of Citi, its analysts have retained their sell rating but increased the price target on this medical device company's shares to NZ$26.25 (A$24.95). This follows the release of its half year results on Wednesday. Although the broker was impressed with its result and believes its Hospital segment is well-placed for very strong growth over the 2020s, it has issues with its valuation and believes its shares are overvalued. The Fisher & Paykel Healthcare share price is trading at $31.07 this afternoon.
Magellan Financial Group Ltd (ASX: MFG)
Analysts at Morgan Stanley have retained their underweight rating and $48.00 price target on this fund manager's shares. According to the note, given Magellan's focus on growth, it has concerns that its performance could be impacted by the recent rotation to value options. It doesn't believe this has been factored into the current share price and fears there could be downside risk in the near term. The Magellan share price is changing hands for $61.09 today.
Xero Limited (ASX: XRO)
A note out of UBS reveals that its analysts have retained their sell rating and $77.00 price target on this cloud-based business and accounting software platform provider's shares. This follows the announcement of a US$600 million (later upsized to US$700 million) convertible notes offering. UBS was surprised by the size of the offering and believes it could be a sign that a significant acquisition is coming. While this has the potential to be a positive, it isn't enough for a change of rating. UBS believes its shares are still overvalued at the current level. The Xero share price is trading at $133.06 this afternoon.
