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:
Commonwealth Bank of Australia (ASX: CBA)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $89.50 on this banking giant’s shares. This follows news that Commonwealth Bank has signed an agreement to sell its general insurance business to Hollard Group for an upfront consideration of $625 million. While Morgan Stanley expects this to boost the bank’s CET1 ratio and allow it to undertake a $5 billion share buyback in August, it isn’t enough for a more positive rating. The broker still believes its shares are overvalued at the current level. The Commonwealth Bank share price is trading at $99.93 today.
Rio Tinto Limited (ASX: RIO)
A note out of UBS reveals that its analysts have downgraded this mining giant’s shares to a sell rating with a $104.00 price target. According to the note, the broker suspects that the iron ore price could retreat by as much as 50% over the next 18 months. This is due to increasing supply in Brazil, growing stockpiles at Chinese ports, and Chinese regulators trying to subdue commodity prices. The broker notes that a decline of this level would make Rio Tinto’s dividend unsustainable. The Rio Tinto share price is currently fetching $121.99.
Scentre Group (ASX: SCG)
Analysts at Macquarie have retained their underperform rating and $2.62 price target on this shopping centre operator’s shares. According to the note, Macquarie is cautious on large retail assets ahead of results season. It doesn’t believe that strong retail sales growth is leading to meaningful improvements in leasing spreads. Its analysts fear this is placing pressure on mall operators’ underlying cash flows. The Scentre share price is trading at $2.86 today.
The post Leading brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.
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More reading
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- Top broker says the Commonwealth Bank (ASX:CBA) share price is still overvalued
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- Rio Tinto (ASX:RIO) share price sinks on broker downgrade
- ASX 200 drops, CBA sinks, Boral sells US division
James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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