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:
Flight Centre Travel Group Ltd (ASX: FLT)
According to a note out of Citi, its analysts have retained their sell rating and $16.90 price target on this travel agent’s shares. While the broker believes that Flight Centre will benefit from the recently announced government stimulus program in the tourism sector, it isn’t enough for a change of rating. The broker suspects that some of the revenue generated by the stimulus will be offset by the end of JobKeeper. Looking ahead, the broker expects Flight Centre to make a loss this year and next year. The Flight Centre share price ended the week at $18.65.
Xero Limited (ASX: XRO)
A note out of UBS reveals that its analysts have retained their sell rating but lifted their price target on this business and accounting platform provider’s shares to $79.50. According to the bote, the broker sees positives in its acquisition of workforce management platform Planday. It also notes that even after the deal, Xero will still have over NZ$1 billion of liquidity to consider other acquisitions. However, due to its current valuation, UBS isn’t in a rush to change its rating. The Xero share price was trading at $115.01 on Friday.
Zip Co Ltd (ASX: Z1P)
Another note out of UBS reveals that its analysts have downgraded this buy now pay later provider’s shares to a sell rating with a $6.40 price target. According to the note, the broker was pleased with Zip’s first half performance and expects more of the same in the short term. Though, it does note that there are execution risks, particularly in the UK. In addition to this, the broker has concerns about rising bond yields. It notes that these could weigh on its valuation and also its funding. The Zip share price ended the week at $8.59.
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More reading
- 10 of the best ASX shares to buy in March
- These were the worst performing ASX 200 shares last week
- What this broker thinks about ASX travel shares after government’s stimulus package
- Why Flight Centre, Northern Star, Southern Cross Media, & Treasury Wine are sinking
- ASX 200 up 0.95%: Afterpay rises, Westpac’s APRA update, Qantas upgraded
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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of Xero. The Motley Fool Australia has recommended Flight Centre Travel Group 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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