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:
Commonwealth Bank of Australia (ASX: CBA)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $89.50 price target on this banking giant's shares. The broker has been looking at the capital positions of the big four banks. It believes they all have significant excess capital and suspects that this could mean share buybacks in the near future. Morgan Stanley estimates that Commonwealth Bank could return $5 billion to shareholders with its FY 2021 results. However, while this is positive, it isn't enough for a change of rating. The broker continues to believe its shares are overvalued. The Commonwealth Bank share price ended the week at $102.52.
St Barbara Ltd (ASX: SBM)
A note out of Macquarie reveals that its analysts have retained their underperform rating and cut the price target on this gold miner's shares to $1.70. The broker made the move after St Barbara withdrew its guidance for its Simberi operation. Macquarie has downgraded its production estimates for FY 2021 and suspects that its FY 2022 production could be impacted. The St Barbara share price was trading at $1.83 at the end of the week.
Wesfarmers Ltd (ASX: WES)
Analysts at Citi have retained their sell rating and $45.00 price target on this conglomerate's shares. This follows the release of Wesfarmers' strategy day event last week. The broker believes that Wesfarmers will need to invest heavily in its retail businesses to position them for medium to long term growth. And while it sees opportunities for Wesfarmers to make value accretive acquisitions, it isn't pricing these in until they have been made. So for now, the broker believes its share overvalued. The Wesfarmers share price was fetching $55.24 on Friday.
