Top brokers name 3 ASX shares to sell next week

Brokers aren’t feeling positive about these ASX shares…

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business man holding sign stating time to sell

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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:

A2 Milk Company Ltd (ASX: A2M)

According to out of Citi, its analysts have retained their sell rating and $5.85 price target. The broker has been looking into Chinese online retailers and notes that domestic infant formula producers are becoming increasingly popular with consumers. This has led to a2 Milk dropping down in its sales rankings. Outside this, the broker remains bearish on the company’s prospects and suspects that there is downside risk to its margins over the longer term. The a2 Milk share price ended the week at $6.34.

Afterpay Ltd (ASX: APT)

A note out of UBS reveals that its analysts have retained their sell rating and lowly $37.00 price target on this payments company’s shares. This follows news that Afterpay is expanding its pay anywhere offering in the United States to cover 12 major retailers including Amazon. While the broker sees positives from the offering, it has concerns over the impact it may have on existing integrated merchant partners. It points out that Afterpay has used existing merchants to acquire customers but is now leveraging those customers to drive sales for their competitors. The Afterpay share price was fetching $129.00 at Friday’s close.

Commonwealth Bank of Australia (ASX: CBA)

Analysts at Morgan Stanley have retained their underweight rating and $89.50 price target on this banking giant’s shares. This follows news that Commonwealth Bank is selling its general insurance business for an upfront fee of $625 million. While the broker expects this to boost its CET1 ratio and support a significant share buyback in August, it isn’t enough for a change of rating. Morgan Stanley notes that its shares are trading on record multiples and appears to believe there are better investment opportunities out there. The Commonwealth Bank share price ended the week at $99.26.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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