On Monday I looked at three ASX shares 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 $5.50 price target on this infant formula company's shares. Although the broker acknowledges that there have been improvements on Chinese ecommerce platforms, it doesn't see a big enough improvement to become more positive. It continues to believe that demand will be weak and weigh on its earnings in the near term. The A2 Milk share price is currently fetching $6.01.
Bubs Australia Ltd (ASX: BUB)
A note out of Citi reveals that its analysts have retained their sell rating and cut their price target on this junior infant formula company's shares to 33 cents. According to the note, the broker has reduced its estimates to reflect a slower than expected recovery due to international border closures. In addition, the broker has concerns about the prospect of lower gross margins and the potential for inventory provisions. Citi also highlights that Bubs' sales were down 2% over the prior corresponding period in the fourth quarter. The Bubs share price is trading at 41 cents today.
Mineral Resources Limited (ASX: MIN)
Analysts at Morgan Stanley have retained their underweight rating but lifted their price target on this iron ore and lithium focused mining company's shares to $49.70. According to the note, the broker has increased its earnings estimates for the coming years. However, that isn't enough for a more positive rating. The broker continues to believe that the market is overlooking project execution risks and the potential for widening discounts for low grade iron ore. The Mineral Resources share price is fetching $59.72 this afternoon.
