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:
AGL Energy Limited (ASX: AGL)
According to a note out of UBS, its analysts have downgraded this energy company’s shares to a sell rating and cut the price target on them to $12.25. The broker made the move after reducing its forecasts to account for margin pressures from lower wholesale electricity prices. It also has concerns over the shift to renewable energy and AGL’s reliance of coal for its electricity generation. Combined, it is expecting the company’s earnings to fall consistently over the coming years. The AGL share price is trading at $12.92 on Tuesday.
OZ Minerals Limited (ASX: OZL)
A note out of Goldman Sachs reveals that its analysts have retained their sell rating but lifted the price target on this copper producer’s shares to $16.70. The broker believes that OZ Minerals’ shares are overvalued at 1.2x net asset value. This compares to the sector average of 1x net asset value. It feels this is being caused partly by investors overvaluing the company’s Carrapateena mine. It notes that its share price implies a value for the asset in line with the larger and higher quality Olympic Dam mine owned by BHP Group Ltd (ASX: BHP). The OZ Minerals share price is fetching $18.52 this afternoon.
Virtus Health Ltd (ASX: VRT)
Analysts at Morgan Stanley have downgraded this fertility treatment company’s shares to an underweight rating but increased the price target on them to $4.90. The broker made the move on the belief that Virtus Health’s shares are overvalued after a very strong gain in recent months. Morgan Stanley also has concerns about a long term shift to lower-value IVF services. The Virtus Health share price is trading at $5.44 today.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Virtus Health Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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