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:
Domino’s Pizza Enterprises Ltd (ASX: DMP)
According to a note out of Citi, its analysts have reiterated their sell rating and $67.40 price target on this pizza chain operator’s shares. Although the broker believes that its overall sales will remain solid in the near term, it is expecting its same store sales growth to soften in the second half of FY 2021 and in FY 2022. It fears this slowing growth could put pressure on its shares and lead to the de-rating of its earnings multiple. The Domino’s share price is trading at $81.56 this afternoon.
GPT Group (ASX: GPT)
Analysts at Morgan Stanley have retained their underweight rating and $4.00 price target on this property company’s shares. This follows its decision to sell its 25% stake in 1 Farrer Place, Sydney for $584.6 million. While this has reduced its gearing to conservative levels, it isn’t enough for a change of rating. The broker continues to believe that the next year or so could be difficult for new leases and renewals. The GPT share price is fetching $4.60 on Thursday.
Zip Co Ltd (ASX: Z1P)
Analysts at UBS have retained their sell rating but lifted the price target on this buy now pay later provider’s shares to $5.70. This follows the release of its trading update this week. According to the note, Zip has been performing better than it expected over the last couple of months. It was also pleased with its transaction frequency in the United States. However, it remains concerned that the end of government stimulus could impact sales growth and increase arrears. The Zip share price is changing hands for $5.96 this afternoon.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited. 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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