Top brokers name 3 ASX shares to sell next week

Brokers aren’t feeling overly positive on these shares…

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Challenger Ltd (ASX: CGF)

According to a note out of Citi, its analysts have downgraded this annuities company’s shares to a sell rating with a reduced price target of $6.90. Citi believes the market’s reaction to Challenger’s quarterly update was surprising. While it highlights that Challenger has upgraded its guidance range, it felt consensus estimates were already largely there. It also has concerns over the company’s maturities, which it notes were very high for a March quarter. The Challenger share price ended the week at $7.11.

Endeavour Group Ltd (ASX: EDV)

A note out of Credit Suisse reveals that its analysts have downgraded this alcohol retailer’s shares to an underperform rating and cut the price target on them to $6.60. The broker was disappointed with Endeavour’s trading update and highlights that the company is continuing to lose market share in the retail channel. In light of this, it feels its shares are expensive at the current level and sees better options for investors elsewhere. The Endeavour share price was fetching $7.74 at Friday’s close.

Zip Co Ltd (ASX: Z1P)

Analysts at Macquarie have retained their underperform rating and slashed their price target on this buy now pay later provider’s shares to $1.05. This follows the release of a quarterly update which revealed falling customer usage and slowing growth. The broker also warns that there are regulatory and funding cost risks that make Zip’s pathway to profitability very cloudy. The Zip share price was trading at $1.11 on Friday.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended Challenger Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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