On Wednesday 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 ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:
Goodman Group (ASX: GMG)
According to a note out of Goldman Sachs, its analysts have retained their sell rating but lifted their price target slightly to $13.31. Goldman bearish view is due to its belief that the integrated property company’s shares are vastly overvalued compared to peers. It notes that Goodman’s Funds Management operations are valued at 32x estimated FY 2022 segment EBITDA. This compares to an average 20x estimated FY 2022 EBITDA for other US-listed Alternative Asset Managers covered by the broker. The Goodman share price is fetching $19.26 this afternoon.
Scentre Group (ASX: SCG)
A note out of Macquarie reveals that its analysts have retained their underperform rating and $2.62 price target on this shopping centre-focused property company. According to the note, the broker points to Scentre’s Bondi Junction mall in Sydney as proof that the leasing environment has disconnected from the strength in retail sales. It believes this disconnect will lead to vacant stores and negative leasing spreads, which will place pressure on underlying cash flows. The Scentre share price is trading at $2.68 today.
Zip Co Ltd (ASX: Z1P)
Analysts at UBS have retained their sell rating and cut their price target on this buy now pay later (BNPL) provider’s shares to $5.60. UBS feels increasing competition could be a problem and weigh on Zip’s margins. Particularly in the United States, where its QuadPay business enjoys higher than normal margins. In addition, the broker feels that the market underestimates the amount of capital required to support its growth, especially if competition increases. The Zip share price is trading at $7.16 on Thursday.