Endeavour Group Ltd (ASX: EDV) and PLS Group Ltd (ASX: PLS) shares just earned sell ratings from two top stock market analysts.
Now the two S&P/ASX 200 Index (ASX: XJO) stocks have delivered widely different returns over the past year, which leads to different reasoning behind those sell recommendations.
For example, ASX 200 lithium stock PLS– formerly known as Pilbara Minerals – has been on a tear amid surging global lithium prices.
On Monday afternoon, PLS shares were trading for $5.15 apiece. That sees the share price up an eye-popping 254.8% over 12 months.
As for Endeavour, shares in the ASX 200 liquor outlets, hotels and gaming venue owner and operator were changing hands for $3.34 each on Monday. This puts the Endeavour share price down 19.7% over 12 months.
Now I should note that Endeavour did pay 17.1 cents a share in fully franked dividends over the past year. Endeavour shares trade on a fully franked trailing dividend yield of 3.3%.
But that's not keeping the ASX 200 stock from joining PLS shares on the chopping block.
Image source: Getty Images
Time to sell PLS shares?
Catapult Wealth's Blake Halligan recently analysed the outlook for the ASX lithium producer (courtesy of The Bull).
"PLS Group is a leading Australian lithium producer focused on spodumene concentrate," he said.
Commenting on the recent strong run higher in PLS shares, Halligan noted:
Over the past three months, sentiment has been driven by a sharp rebound in spot spodumene prices and improving earnings expectations. Stronger spodumene prices are triggering global supply re-starts and expansions.
But following on the big share price gains, Halligan believes investors would do well to take profits on the lithium stock.
He concluded, "The company's valuation already reflects elevated prices amid supply growth potentially adding pressure on margins."
Which brings us to…
Time to exit Endeavour shares?
Atop selling PLS shares investors also might want to consider unloading Endeavour shares.
That's according to Shaw and Partners James Bills.
"Endeavour operates liquor outlets, hotels and gaming facilities," Bills said.
"It's navigating a more challenging consumer environment amid cost pressures in fiercely competitive sectors.," he noted.
Summarising his sell recommendation on Endeavour shares, Bills concluded:
While the company has a strong asset base and market position, we believe near term performance is likely to remain subdued. With limited catalysts for a re-rating, the stock lacks appeal at this stage of the cycle, in our view. The shares have fallen from $4.04 on March 2 to trade at $3.375 on July 2.
