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Top brokers name 3 ASX shares to sell next week

hand drawing a clock face with the words time to sell
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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Bubs Australia Ltd (ASX: BUB)

According to a note out of Citi, its analysts have retained their sell rating and cut the price target on this infant formula company’s shares to 51 cents. The broker made the move after Bubs’ second quarter update fell short of its expectations. Not only did the company’s sales miss expectations, but Bubs burned through more cash than it expected. Citi isn’t confident the third quarter will be any better, especially given the continued disruption in the daigou channel. The Bubs share price ended the week at 64 cents.

Galaxy Resources Limited (ASX: GXY)

Analysts at Morgan Stanley have retained their underweight rating and $1.35 price target on this lithium miner’s shares. The broker was disappointed with Galaxy’s quarterly update and notes that recoveries were lower than expected and costs came in higher than it forecast. In addition to this, Galaxy’s production and recoveries guidance for FY 2021 fell a touch short of its estimates. The Galaxy share price last traded at $2.69.

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. According to the note, the broker made the move after reducing its earnings estimates to reflect a stronger Australian dollar. In addition to this, the broker thought that its valuation was getting stretched after a strong gain over the last few months. The Reece share price was trading at $16.01 at Friday’s close.

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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. 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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