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:

Bega Cheese Ltd (ASX: BGA)

Analysts at Goldman Sachs have downgraded this diversified food company’s shares to a sell rating with a $5.15 price target. The broker made the move largely on valuation grounds. It notes that Bega’s shares are trading in line with its valuation whereas its coverage average offers 33% upside. Goldman also has concerns about the headwinds facing the Australian Dairy Industry and the potential impact on future earnings. The Bega Cheese share price was trading at $5.05 on Friday.

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Morgans, its analysts have retained their reduce rating and $77.00 price target on this banking giant’s shares. While the broker expects a rising interest rate environment to generally be supportive of major bank margins in net terms, it isn’t convinced that such an environment will be a walk in the park for the banks. Morgans highlights that higher interest rates will likely place downward pressure on asset prices and credit growth, as well as increasing the risk of asset quality deterioration. Outside this, the broker feels the bank’s shares are overvalued at the current level. The CBA share price ended the week at $103.88.

Fortescue Metals Group Limited (ASX: FMG)

A note out of Credit Suisse reveals that its analysts have retained their underperform rating but lifted their price target to $15.00. This follows the release of a quarterly update which revealed slightly higher than expected shipments and pricing that was largely in line with forecasts. However, this isn’t enough for a change of rating. Credit Suisse continues to struggle to justify the company’s valuation in comparison to peers and believes the risks are to the downside. The Fortescue share price was fetching $21.63 at Friday’s close.

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. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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