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 $7.15 price target on this infant formula and fresh milk company’s shares. The broker has concerns about rising competition in the key China market following the release of the results of China-based rival Feihe. Citi suspects that domestic producers could win a greater market share in the future. In addition to this, it has concerns that resellers of its infant formula may have to discount products soon as the expiry date of their inventory draws closer. The a2 Milk share price is trading at $8.39 on Tuesday. Incidentally, for the same reasons, Citi has reiterated its sell rating and 35 cents price target on Bubs Australia Ltd (ASX: BUB) shares.
AGL Energy Limited (ASX: AGL)
Analysts at Morgan Stanley have retained their underweight rating and $10.68 price target on this energy company’s shares. According to the note, the broker was pleased to see AGL renegotiate its supply deal with the Portland smelter last week. This removes an element of uncertainty from the equation. However, it is predicting that the new pricing will be below current market pricing, which could weigh on future earnings. The AGL share price is now trading below this price target at $10.54.
Blackmores Limited (ASX: BKL)
Another note out of Citi reveals that its analysts have retained their sell rating and $59.20 price target on this health supplements company’s shares. The broker has been looking at Blackmores’ options in the China market. Citi appears to believe the company should consider a partnership in the country to support it with regulatory and distribution capabilities. However, for the time being, the broker remains bearish. Especially given concerns over increasing competition in Australia, tough trading conditions in the daigou market, and its soft second half guidance. The Blackmores share price is trading notably higher than Citi’s price target at $83.36 today.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
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 and Blackmores Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
- 2 fantastic ASX shares with enormous growth potential – May 15, 2021 2:45pm
- 2 quality ASX dividend shares for income investors – May 15, 2021 2:30pm
- These were the worst performing ASX 200 shares last week – May 15, 2021 9:00am