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:
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
According to a note out of Citi, its analysts have retained their sell rating but lifted their price target on this medical device company’s shares to NZ$26.50 (A$24.72). While Citi acknowledges that Fisher & Paykel Healthcare’s recent trading update was very strong, it isn’t enough for a change in rating. The broker continues to believe that the company’s shares are overvalued at the current level. The Fisher & Paykel Healthcare share price last traded at $32.91.
Reece Ltd (ASX: REH)
A note out of Morgans reveals that its analysts have downgraded this plumbing parts company’s shares to a reduce rating with a price target of $11.45. The broker has reduced its earnings estimates to reflect a stronger Australian dollar. In addition to this, the broker feels that its valuation is stretched after a strong gain over the last few months. The Reece share price was trading at $16.98 on Monday.
Zip Co Ltd (ASX: Z1P)
Analysts at Macquarie have retained their underperform rating but lifted the price target on this buy now pay later provider’s shares to $5.35. According to the note, Zip Co delivered a stronger than expected second quarter update thanks largely to its US-based Quadpay business. It reported a 217% increase in transaction volume to $673.1 million and a 180% lift in customer numbers to 3.2 million in the key market. However, the broker is concerned that competition is intensifying and suspects that customer acquisition costs could increase in 2021. The Zip share price was trading at $7.42 on Monday.
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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.