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 investors might want to hear about 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 Macquarie, its analysts have retained their underperform rating and cut their price target on this infant formula company’s shares to $5.20. Macquarie made the move following the release of the company’s investor update. Its analysts highlight that A2 Milk’s medium term outlook is very weak. It also notes that there is still significant risk and uncertainty with management’s growth targets. The A2 Milk share price ended the week at $6.25.
Coles Group Ltd (ASX: COL)
Analysts at UBS have retained their sell rating and $16.50 price target on this supermarket giant’s shares. This follows the release of the supermarket operator’s first quarter sales update. Although Coles delivered a better than expected update, it isn’t enough for a change of rating. UBS believes the outlook for food retailing in Australia is deteriorating. The Coles share price was fetching $17.14 at Friday’s close.
Fortescue Metals Group Limited (ASX: FMG)
A note out of Goldman Sachs reveals that its analysts have retained their sell rating and cut their price target on this mining giant’s shares to $11.00. Goldman was disappointed with Fortescue’s performance during the first quarter. Not only did the miner fall short of the broker’s shipments estimates, its price realisation and product mix were well under its expectations. In light of this and its belief that its shares are still overvalued, Goldman isn’t in a rush to change its rating. The Fortescue share price ended the week at $13.93. Though, it is worth noting that not everyone is bearish. See here for a bullish view.
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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 owns shares of and has recommended COLESGROUP DEF SET. 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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