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 but lifted their price target on this mining giant's shares to $15.20. The broker believes Fortescue's shares are extremely overvalued in comparison to BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO). It also has concerns over capex and execution risks for the Iron Bridge & Fortescue Future Industries businesses. The Fortescue share price is trading at $21.64 today.
Iluka Resources Limited (ASX: ILU)
A note out of Citi reveals that its analysts have downgraded this mineral sands and rare earths producer's shares to a sell rating with a $10.50 price target. Citi made the move on valuation grounds following a very strong rise by its shares over the last few months. It also highlights that it will still be several years until Iluka is generating revenue from the Eneabba rare earths refinery. The Iluka share price is fetching $12.45 on Thursday.
New Hope Corporation Limited (ASX: NHC)
Analysts at Goldman Sachs have downgraded this coal miner's shares to a sell rating with a $3.00 price target. According to the note, the broker downgraded New Hope's shares on valuation grounds. It notes that its shares have rallied hard in recent months and now trades at 1.3x net asset value. In addition, the broker sees plenty of value on offer elsewhere in the resources sector. The New Hope share price is trading at $3.55 this afternoon.
