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 caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:
Nanosonics Ltd (ASX: NAN)
According to a note out of Citi, its analysts have retained their sell rating but lifted their price target on this infection prevention company’s shares to $4.30. Citi suspects that FY 2021 could be a tough year for Nanosonics due to the impact of COVID-19 on Trophon EPR adoption. In addition to this, the broker believes that the market is already pricing in a new product launch with a significant addressable opportunity. While it is optimistic that new products will be launched in the near future and support its growth, too little is known of them at this point to factor in appropriately. The Nanosonics share price ended the week at $5.81.
Qantas Airways Limited (ASX: QAN)
A note out of Credit Suisse reveals that its analysts have retained their underperform rating but lifted the price target on this airline operator’s shares to $4.15. While the broker sees positives in its working capital position, it isn’t enough for a change of rating. Credit Suisse continues to have concerns about increasing competition in the domestic market from Virgin and REX. The Qantas share price was trading at $5.10 at Friday’s close.
Zip Co Ltd (ASX: Z1P)
Analysts at Macquarie have retained their underperform rating and lifted their price target on this buy now pay later provider’s shares to $5.70. According to the note, the broker has concerns that the company’s QuadPay business could see its strong net transaction margins come under significant pressure due to increasing competition. It notes that the company is having to increase its customer acquisition costs to drive its customer growth. The Zip share price ended the week at $9.56.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited and ZIPCOLTD FPO. The Motley Fool Australia has recommended Nanosonics 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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