The S&P/ASX 200 Index (ASX: XJO) is up 9.3% over the past year, but the three ASX 200 giants we look at below have all gained far more.
And with those strong runs behind them, two leading experts believe that now is the right time to take some profits off the table and put them to better use (courtesy of The Bull).
Lock in gains on the biggest stock on the ASX
First up, we have Commonwealth Bank of Australia (ASX: CBA).
CBA shares are up 0.1% in morning trade today, changing hands for $169.43 each. That sees shares in the ASX 200 bank stock up 25.5% over 12 months, not including dividends.
And it gives Australia's biggest bank and the biggest stock trading on the ASX a market cap of $283 billion.
But after this strong run higher, and with headwinds potentially building, Morgans' Damien Nguyen recommends selling CBA shares.
"CBA is a high-quality bank with strong market share, but its valuation is stretched relative to peers," said Nguyen.
He noted:
It trades on a significantly higher price-to-earnings ratio compared to global counterparts.
Slowing credit growth, margin compression and rising household financial stress poses a risk to earnings. With limited upside and a premium valuation, we believe it's prudent to lock in some gains and rotate into better value financials.
Morgans' Nguyen also has a sell rating on Wesfarmers Ltd (ASX: WES) shares.
Wesfarmers shares are down 1.5% today, trading for $88.95 each. That sees Wesfarmers shares up 29.0% since this time last year, and this also doesn't include the two dividends.
And it gives this ASX 200 giant a market cap of $101 billion.
"Wesfarmers has a strong portfolio of businesses, but near-term risks are building," Nguyen noted.
According to Nguyen:
Lithium losses, margin pressure at the Bunnings hardware giant and a potentially softer consumer environment weigh on sentiment. The shares have risen from $68.53 on April 7 to trade at $91.45 on October 2. In our view, the stock trades at a premium to discretionary peers, and we see better opportunities elsewhere.
The company's growth outlook doesn't support its current valuation. Investors may want to consider taking profits before moving the proceeds to more attractively priced alternatives.
Which brings us to…
The third ASX 200 giant to sell today
If you follow along with the markets, you'll know that Lynas Rare Earths Ltd (ASX: LYC) has been on an absolute tear this year.
Shares in the ASX 200 rare earths miner are down 0.6% today, trading for $19.16 apiece. That puts the Lynas share price up 150.0% over 12 months, with the share price up a whopping 193.4% in 2025. Lynas does not pay dividends. The miner currently commands a market cap of $19 billion.
But after this remarkable surge, Catapult Wealth's Blake Halligan believes Lynas shares are in overvalued territory.
"Lynas is the largest producer of rare earths outside of China," said Halligan, who has a sell recommendation on Lynas shares.
According to Halligan:
Concerns about the trade relationship between China and the United States has contributed to a strong increase in the Lynas share price. The shares have risen from $6.85 on April 2 to trade at $17.26 on October 2. The company recently raised $932 million from institutional investors and eligible shareholders. We believe the shares are overvalued.
As for what might support the ASX 200 rare earths giant moving forward, Halligan said:
The only way we can see our fair value increasing to its current share price is through a takeover offer for Lynas, or Australia implementing a rare earths price floor. We can't envisage either of our options happening anytime soon.
