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:
Domino’s Pizza Enterprises Ltd (ASX: DMP)
According to a note out of Credit Suisse, its analysts have retained their underperform rating and $70.71 price target on this pizza chain operator’s shares. The broker notes that Domino’s has signed an agreement to acquire the Domino’s Taiwan business. While it sees opportunities for the company to grow its store network materially in the country, it isn’t enough for a change of rating. With the acquisition expected to be just 2% earnings per share accretion, Credit Suisse continues to believe that its shares are overvalued. The Domino’s share price ended the week at $120.67.
Fortescue Metals Group Limited (ASX: FMG)
Analysts at Morgans have retained their reduce rating and $18.80 price target on this iron ore producer’s shares. According to the note, the broker believes there are early signs of moderation in respect to iron ore demand. Which could be bad news for the company, as it feels Fortescue is the most sensitive to falling iron ore prices. Overall, it feels its valuation is stretched and outweighs the attractiveness of its huge dividend yield. The Fortescue share price was fetching $22.42 at the end of last week.
InvoCare Limited (ASX: IVC)
A note out of Citi reveals that its analysts have downgraded this funerals company’s shares to a sell rating and cut the price target on them to $10.00. Citi notes that InvoCare has lost meaningful market share over the last five years despite spending almost half a billion on acquisitions and capital expenditure. It doesn’t appear to believe things will improve in the near term and has downgraded its earnings estimates meaningfully out to FY 2023. The InvoCare share price end the week at $11.39.