Yesterday we looked at three ASX shares 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:
ARB Corporation Limited (ASX: ARB)
According to a note out of Credit Suisse, its analysts have downgraded this 4×4 parts company’s shares to an underperform rating with a $38.00 price target. Although the broker expects a strong half year result from ARB next month, it suspects that its growth thereafter could slow and its margins could soften. In light of this, it believes its shares are trading at too much of a premium. The ARB share price is trading at $47.64 this afternoon.
Fortescue Metals Group Limited (ASX: FMG)
A note out of Citi reveals that its analysts have downgraded this iron ore giant’s shares to a sell rating with a $17.20 price target. The broker made the move largely on valuation grounds. While Citi acknowledges that iron ore prices have been more favourable than it was expecting, it still believes its current valuation is unjustifiable. The Fortescue share price is fetching $20.80 today.
Insurance Australia Group Ltd (ASX: IAG)
Analysts at Morgan Stanley have retained their underweight rating and $3.75 price target on this insurance company’s shares. According to the note, the broker suspects that IAG may need to increase its home and motor insurance pricing to protect its margins from claims inflation and higher natural catastrophe costs. It appears concerned that this could weigh on its performance and market share. The IAG share price is trading at $4.38.
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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 Australia has recommended ARB Corporation 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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