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 Credit Suisse, its analysts have retained their underperform rating and $5.00 price target on this infant formula company’s shares. The broker notes that the Chinese government is aiming to boost its birth rate by allowing couples to have three children now. While this could be a boost to demand for infant formula, the broker appears to believe it’s too soon to get excited. Especially as it was already factoring in an increase in China’s birth rate next year due to a catch up from a slowdown during the pandemic. The a2 Milk share price is trading at $5.70 on Tuesday.
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
A note out of UBS reveals that its analysts have retained their sell rating and cut the price target on this medical device company’s shares to NZ$22.65 (A$21.25). According to the note, the broker is expecting a sharp decline in profits from Fisher & Paykel Healthcare in FY 2022 after having its recent FY 2021 results boosted by pandemic-driven demand for ventilators. In light of this, it sees its shares as overvalued and fears they could come under pressure as investors shift away from COVID winners. The Fisher & Paykel Healthcare share price is trading at A$27.81 today.
Fortescue Metals Group Limited (ASX: FMG)
Analysts at Morgan Stanley have retained their underweight rating and $17.45 price target on this iron ore producer’s shares. This follows the release of an update on its Iron Bridge project earlier this week. That update revealed that its capital estimate has been revised higher to US$3.3 billion to US$3.5 billion. Morgan Stanley believes these revisions could weigh on the project’s valuation. It also sees risks to low grade iron ore discounting increasing meaningfully. The Fortescue share price is trading at $22.88 today.