On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.
Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.
Here’s why these brokers are bearish on them:
Amcor PLC (ASX: AMC)
According to a note out of Goldman Sachs, its analysts have retained their sell rating but lifted their price target on this packaging company’s shares to $12.50. Amcor delivered stronger than expected earnings growth in the third quarter. Its EBIT increased 10% compared to Goldman’s 7% forecast. However, it remains sell rated on valuation grounds. It notes that Amcor is trading at a notable premium to other packaging companies under its coverage. Amcor’s shares are changing hands for $14.10 this afternoon.
Commonwealth Bank of Australia (ASX: CBA)
A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on this banking giant’s shares to $56.00. According to the note, following the release of its third quarter update, the broker sees little reason that Commonwealth Bank’s shares should trade at a premium to its peers. In addition to this, it has forecast a sizeable dividend cut in August and has concerns over margin pressures. The Commonwealth Bank share price is down almost 3% to $59.16 this afternoon.
Sigma Healthcare Ltd (ASX: SIG)
Analysts at UBS have retained their sell rating and 53 cents price target on this pharmacy chain operator and distributor’s shares following its trading update. Although Sigma reported strong sales growth in March because of the pandemic, it notes that management has decided against providing guidance for FY 2021 at this stage. So, with its shares trading at approximately 20x estimated forward earnings, UBS sees no reason to change its rating at this point. The Sigma share price is trading at 57.5 cents this afternoon.
Those may be the shares to sell, but here are the top shares that have just been given buy ratings. They look dirt cheap after the market crash.
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Returns as of 7/4/2020
More reading
- ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
- Why Beach, CBA, Qantas, & Xero shares are dropping lower
- What happens to ASX shares if Australian house prices do fall 30%?
- Is the CBA share price a buy?
- Negative interest rates coming? Here’s what it would mean for ASX shares
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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