Yesterday 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:
AGL Energy Limited (ASX: AGL)
According to a note out of UBS, its analysts have retained their sell rating and $7.60 price target on this energy company's shares. This follows the release of a demerger update earlier this week. UBS doesn't appear to be a fan of its plans and sees material earnings headwinds ahead. So much so, it suspects the company could report a 42% decline in earnings in FY 2022. In light of this, it doesn't see value in its shares at the current level. The AGL share price is trading at $8.14 today.
Reece Ltd (ASX: REH)
A note out of Macquarie reveals that its analysts have downgraded this plumbing parts company's shares to an underperform rating with a $19.40 price target. The broker made the move on valuation grounds following a very strong gain since the start of the year. Macquarie points out that its shares are trading at double the average PE ratio of the ASX 200 industrials sector and doesn't see sufficient upside to its earnings estimates to justify this. The Reece share price is fetching $22.98 today.
Woolworths Group Ltd (ASX: WOW)
Analysts at Credit Suisse have downgraded this supermarket operator's shares to an underperform rating with a $32.92 price target. According to the note, the broker made the move on valuation grounds, with its shares trading at ~30x estimated FY 2022 earnings. It points out that this means Woolworths' shares trade at a significant premium to rival Coles Group Ltd (ASX: COL). The Woolworths share price is trading at $37.54 this afternoon.
