On Monday 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 these ASX shares:
JB Hi-Fi Limited (ASX: JBH)
According to a note out of Morgan Stanley, its analysts have downgraded this retailer’s shares to an underweight rating with a reduced price target of $46.00. The broker made the move partly on valuation grounds after a strong gain took its shares close to all-time highs. In addition to this, Morgan Stanley has suggested investors be cautious when it comes to the household goods part of the retail sector. Particularly given how this area of the market benefited from early panic buying 12 months ago. This means JB Hi-Fi will now be cycling very tough comps. The JB Hi-Fi share price is fetching $51.79 today.
Pilbara Minerals Ltd (ASX: PLS)
A note out of Ord Minnett reveals that its analysts have retained their sell rating but raised their price target on this lithium producer’s shares to 75 cents. According to the note, the broker has lifted its price target to reflect a recovery in demand for lithium and rising prices. However, even after factoring this in, Ord Minnett still believes that the company’s valuation is stretched at the current level. The Pilbara Minerals share price is trading at $1.03 this afternoon.
Synlait Milk Ltd (ASX: SM1)
Analysts at Morgans have retained their reduce rating and cut the price target on this dairy processor’s shares to $2.58. This follows the release of Synlait’s underwhelming half year result on Monday. According to the note, Morgans has downgraded its earnings estimates to reflect management’s guidance and a slower than expected recovery over the coming years. In addition to this, the broker appears to have a few concerns over its balance sheet. The Synlait share price is trading at $3.15 on Tuesday afternoon.
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More reading
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- Why Immutep, Inghams, REA Group, & Synlait shares are sinking
- What’s happening with ASX lithium shares as battery-grade lithium prices push higher?
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- Synlait (ASX:SM1) share price on watch after reporting huge profit decline
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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