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:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Morgans, its analysts have retained their reduce rating and $73.00 price target on this banking giant’s shares following a review of the banking sector. While Morgans is positive on the sector, it continues to believe the CBA share price is overvalued at the current level and sees better value on offer with other banks. Morgans has previously stated its belief that the premium CBA’s shares trade at to the other big banks is unjustifiably large. The CBA share price ended the week at $97.90.

Insurance Australia Group Ltd (ASX: IAG)

A note out of Morgan Stanley reveals that its analysts have downgraded this insurance company’s shares to an underweight rating and cut the price target on them to $3.75. The broker has concerns over IAG’s margin outlook and ability to hold onto its market share. In light of this, it feels investors should stay away from the company’s shares, even though they’re trading close to their 52-week low. The IAG share price was fetching $4.40 at Friday’s close.

Magellan Financial Group Ltd (ASX: MFG)

Analysts at UBS have retained their sell rating and $29.50 price target on this struggling fund manager’s shares. According to the note, the broker was pleased to see Magellan’s funds under management update reveal an end to its run of net outflows during November. However, given the very poor performance of its flagship fund, which trails its benchmark materially, the broker isn’t getting excited. It feels this will weigh on performance fees and fund inflows. The Magellan share price ended the week at $29.12.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

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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 and has recommended Insurance Australia 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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The Adore Beauty Group Ltd (ASX: ABY) share price has multiple factors that could make it a useful ASX share to consider.

Adore Beauty was Australia’s first beauty-focused e-commerce website. It’s now the market leader with more than 10,000 products on sale from 260 brands.

Operates in a large and rapidly growing market

The ASX share points out that it has a large and growing addressable market to look at in Australia. The beauty and personal care market in this country is worth $11.2 billion.

Compared to other countries, Australia is in the early adoption part of the process, with online sales currently representing 11.4% of the total sales at $1.3 billion.

While the beauty and personal care category is growing at a compound annual growth rate (CAGR) of 3.8%, online growth is growing at a much faster pace. The forecast CAGR for online growth is 26% between now and 2024. Within the online segment of the market, Adore has a 13% market share and boasts of a long history of growing faster than the market.

Adore Beauty has strong tailwinds behind it, with the accelerated shift to digital and convenience channels, as well as the positive of more consumers like ‘millennials’ and younger cohorts now entering the market.

Globally, accelerated growth is occurring in segments where Adore Beauty is “particularly strong”, such as skincare, which is the company’s largest category.

Heavily pursuing expansion

The e-commerce ASX share is doing everything it can to grow the business, which could also enable the best performance of the Adore Beauty share price.

It wants to have the best offering for customers. Adore Beauty offers a brand portfolio that is not normally found from a single retailer, including prestige department store brands, professional salon and clinic brands, niche brands and masstige.

The company aims to provide a best in class online customer experience that results in loyal, returning customers. In the first quarter of FY22, the company boasted of strong customer retention with returning customer growth of 63% year on year.

Adore Beauty has also been working on a data-driven personalisation and content engagement strategy that educates and entertains customers, making it the first place that customers want to look.

The online beauty business has been expanding its media network of podcasts, videos and blog posts. This year it launched three new podcasts and has three of the top 10 podcasts in the Australian fashion and beauty category.

Adore Beauty expects to maintain an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of between 2% to 4% in the short to medium-term whilst re-investing for growth.

Over the longer-term, it’s expecting scale benefits to increase operating leverage and deliver more EBITDA margin growth.

Rapid revenue growth

The above initiatives and strategies are helping the ASX share grow its sales really quickly.

In FY21 the revenue increased by 48% to $179.3 million, with a 39% increase in active customers to 818,000.

This growth has continued into the first quarter of FY22, with revenue rising by 25% to $63.8 million.

This revenue growth can help the bottom line and Adore Beauty share price over time.

The post 3 compelling reasons why the Adore Beauty (ASX:ABY) share price could be a top buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty 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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