Yesterday 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 ASX shares that have just been given sell ratings by brokers are listed below. Here's why these brokers are bearish on them:
Altium Limited (ASX: ALU)
According to a note out of Macquarie, its analysts have retained their underperform rating and cut their price target on this electronic design software company's shares to $27.10. This comes just a day after the broker downgraded Altium's shares and cut its price target to $27.60. Macquarie has been looking at discounting and suspects that this could weigh on its revenues in the coming years. As a result, it feels it will be difficult for Altium to achieve its US$500 million revenue aspirational target by FY 2026. The Altium share price is fetching $30.73 this afternoon.
IGO Ltd (ASX: IGO)
A note out of Morgan Stanley reveals that its analysts have retained their underweight rating but increased their price target on this clean energy miner's shares to $8.40. Morgan Stanley notes that IGO delivered a result in line with its expectations in FY 2021. It has also upgraded its earnings estimates for the coming years to reflect stronger lithium price forecasts. However, that isn't enough for a change of rating due to valuation reasons. The IGO share price is trading at $9.59 on Thursday.
Zip Co Ltd (ASX: Z1P)
Analysts at UBS have retained their sell rating and cut their price target on this buy now pay later provider's shares to $5.40. According to the note, the broker is positive on Zip's growth prospects in the US market and expects it to become its biggest generator of sales in FY 2022. However, although UBS is forecasting strong sales growth, it is also expecting higher costs. This is due largely to Zip's investment in sales and marketing to support its growth. The latter has led to earnings estimates downgrades and a reduction in its price target. The Zip share price is fetching $6.88 today.
