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:
Ardent Leisure Group Ltd (ASX: ALG)
According to a note out of Ord Minnett, its analysts have retained their sell rating and 75 cents price target on this entertainment company’s shares. Although the broker was pleasantly surprised by the strong performance of its Main Event business in the United States, it isn’t convinced that this will be maintained. Ord Minnett suspects that COVID stimulus payments have supported its strong performance and may not be repeated in the coming months. Overall, the broker feels the company is still some way of becoming profitable. The Ardent Leisure share price ended the week at 94 cents.
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
A note out of UBS shows that its analysts have retained their sell rating but lifted their price target on this medical device company’s shares to NZ$24.80 (A$23.00). According to the note, UBS is expecting Fisher & Paykel Healthcare to deliver a strong full year result next week. However, this is being driven by COVID-19 tailwinds, which are unlikely to be repeated in FY 2022. In light of this, the broker is forecasting a sharp decline in its earnings next year. As a result, it feels its shares are overvalued at the current level. The Fisher & Paykel Healthcare share price was fetching $31.22 at Friday’s close.
Iluka Resources Limited (ASX: ILU)
Analysts at Credit Suisse have retained their underperform rating and cut the price target on this mineral sands company’s shares to $5.30. This follows an announcement which reveals that Iluka plans to suspend its Sierra Rutile operation for six months later this year. Credit Suisse notes that the decision further clouds the outlook for the Sembehun project, which needs the Sierra Rutile infrastructure to be operational. The Iluka share price ended the week at $7.56.