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:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Credit Suisse, its analysts have retained their underperform rating and $5.50 price target on this struggling infant formula company’s shares. This follows the release of a disappointing full year result last week. Credit Suisse has concerns about the future, particularly given how the company is losing share in the Stage 1 category. Combined with China’s falling birth rate, it feels this could eventually weigh on its Stage 2 and Stage 3 product sales. The A2 Milk share price ended the week at $5.89.
Reece Ltd (ASX: REH)
A note out of Citi reveals that its analysts have retained their sell rating and $13.50 price target on this plumbing parts company’s shares. Although Reece delivered a result ahead of its expectations in FY 2021, it wasn’t enough for a change of rating. The broker continues to believe that its shares are overvalued. Especially given the uncertainty around underlying market conditions. The Reece share price was fetching $21.05 at Friday’s close.
Woolworths Group Ltd (ASX: WOW)
Another note out of Credit Suisse reveals that its analysts have retained their underperform rating and cut the price target on this retail conglomerate’s shares to $31.02. Although Woolworths’ full year result was in line with the broker’s expectations, it isn’t enough to become more positive on the investment opportunity here. The broker continues to struggle with the multiples its shares are trading on. In addition, Credit Suisse has reduced its earnings estimates to reflect higher costs and the impact of lockdowns on its Big W business. The Woolworths share price was trading at $40.96 at the end of the week.
The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.
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More reading
- Despite disappointing FY21 results, the A2 Milk (ASX:A2M) share price is still up in August. Here’s why
- Leading brokers give their verdict on the A2 Milk (ASX:A2M) share price
- How does the Woolworths (ASX:WOW) earnings result compare to Coles (ASX:COL)?
- The ASX reporting wrap-up: A2 Milk, Woolworths, Appen
- ASX 200 drops, A2 Milk sinks, Appen plummets
Motley Fool contributor James Mickleboro has no position in any of the stocks 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 recommended A2 Milk. 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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