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:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Citi, its analysts have retained their sell rating and $14.20 price target on this infant formula company’s shares. The broker was disappointed but not surprised by a2 Milk’s recent update which revealed significant weakness in the daigou channel and led to a sizeable guidance downgrade. Citi doesn’t appear to believe these headwinds will ease quickly and holds firm with its sell rating, even though its shares are now trading well below its price target. The a2 Milk share price is trading at $10.50 this afternoon.
Bendigo and Adelaide Bank Ltd (ASX: BEN)
Analysts at Morgan Stanley have retained their underweight rating but lifted the price target on this regional bank’s shares to $7.70. It notes that its housing loan growth is well ahead of forecasts, recent changes from APRA are favourable, and its growth strategy appears well-supported. However, it doesn’t believe its shares offer value for money at the current level and prefers other options in the space. The Bendigo and Adelaide Bank share price is fetching $9.48 on Tuesday.
QBE Insurance Group Ltd (ASX: QBE)
A note out of Macquarie reveals that its analysts have retained their underperform rating and $8.00 price target on this insurance giant’s shares. This follows the release of a market update which revealed that QBE is expecting to post a significant loss in FY 2020. It doesn’t appear to believe the worst is over for the company and notes that its return on capital expectations in North America are below its cost of capital. The QBE share price is trading at $8.76 today.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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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