Big brokers have come off their holiday breaks this week with updates on a number of ASX 200 shares. Here are the broker downgrades from 12 January 2021 to watch out for.
AGL Energy Limited (ASX: AGL)
The AGL share price has fallen more than 40% in the last 12 months, despite a market leading 7.80% dividend yield.
The energy company recently slashed its FY21 guidance, now expecting underlying profit after tax to be between $500 million and $580 million, down from the previous guidance range of $560 million to $660 million.
As a result, Credit Suisse lowered its AGL share price target from $12.60 to $11.00 with an underperform rating. This represents a downside of 9% to its share price of $12.07 at close of trade today.
ASX Ltd (ASX: ASX)
The ASX share price has struggled to deliver shareholder return in 2020, slumping 10% over the year. The most notable event for ASX last year was on 16 November, where a software glitched caused an embarrassing all-day outage.
Credit Suisse lowered its ASX share price target from $73.00 to $71.00 with an underperform rating. This follows a similar logic to that of Goldman Sachs, which maintained a sell rating for ASX shares on 20 December 2020.
Goldman described the company at the time as “expensive given headwinds” after the company’s mixed performance, with weaker derivatives and over-the-counter (OTC) markets but solid performances across its listings and issuer services, trading services and equity post-trade services.
Magellan Financial Group Ltd (ASX: MFG)
Goldman Sachs remains sell rated on Magellan with a price target of $50.70. The broker’s commentary highlights Magellan’s funds under management falling 1.6% from $103.0 billion to $1.1.4 billion during December.
The key drivers of Goldman’s stance was the fund’s underperformance. Relative performance was soft in December, with the Global Fund underperforming the benchmark by -2.7%, following an -8.8% underperformance in November. The broker believes that Magellan is most negatively exposed to the recent US senate run-off elections which could result in lower performance fees and funds under management.
Citi also lowered its Magellan share price target from $60.00 to $56.50 with a neutral rating. While Credit Suisse lowered its price target from $58.50 to $55.00.