On Wednesday, we looked at three ASX shares that brokers have given buy ratings to this week. Unfortunately, not all shares are in favour with brokers right now.
Three ASX shares that have just been given sell ratings by brokers are listed below. Here's why they are bearish on them:
Fortescue Metals Group Limited (ASX: FMG)
According to a note out of Goldman Sachs, its analysts have retained their sell rating and $13.50 price target on this iron ore giant's shares. This follows the release of the company's second quarter update earlier this week. While Fortescue delivered a second quarter result in line with Goldman's expectations, it still has big issues with its valuation. The broker notes that its shares are trading at 1.65x net asset value (NAV), which is notably higher than its two largest peers at 0.9x NAV. Goldman also has concerns over its Fortescue Future Industries business and the huge cost involved with the decarbonisation of its Pilbara operations. The Fortescue share price is trading at $19.47 today.
Mineral Resources Limited (ASX: MIN)
A note out of Ord Minnett reveals that its analysts have downgraded this mining and mining services company's shares to a sell rating with a trimmed price target of $45.00. This follows the release of a quarterly update which fell short of the broker's expectations. In addition to this, Ord Minnett continues to believe its shares are overvalued at the current level. The Mineral Resources share price is fetching $53.85 on Thursday.
Premier Investments Limited (ASX: PMV)
Another note out of Goldman Sachs reveals that its analysts have retained their sell rating and $23.40 price target on this retail giant's shares. Goldman has had a quick look at Premier Investments' trading update. And while it notes that Premier Retail's earnings easily beat its expectations, this was driven largely by one-off rental benefits. Overall, the update hasn't done anything to ease the broker's longer term concerns. The Premier Investments share price is trading at $26.99 this afternoon.
