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:
Ramsay Health Care Limited (ASX: RHC)
According to a note out Morgan Stanley, its analysts have retained their underweight rating but lifted their price target on this private hospital operator’s shares slightly to $56.00. Morgan Stanley has been looking into elective surgeries and notes that rates had recovered to 75% of pre-pandemic levels at the end of June (excluding Victoria). While this is a positive and it expects Ramsay’s utilisation rates to be solid during the first half of FY 2021, it continues to have concerns over private health insurance affordability issues. Especially given the prospect of high unemployment levels. The Ramsay share price is changing hands for $62.32 this afternoon.
Reece Ltd (ASX: REH)
Analysts at Citi have downgraded this plumbing parts company’s shares to a sell rating with a reduced price target of $8.55. According to the note, the broker expects the pandemic to result in tough trading conditions that stifle its earnings growth over the next couple of years. Particularly given the weakening housing market activity and softening house prices. The Reece share price is trading at $9.79 on Tuesday.
South32 Ltd (ASX: S32)
A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and $1.80 price target on this mining giant’s shares. Although the broker notes that South32 has exposure to the strengthening silver price, it remains concerned that weak coal and manganese prices will offset this and weigh on its earnings. In light of this, it sees no reason to change its rating at this point. The South32 share price is changing hands at $2.23 this afternoon.
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- Why I would buy Ramsay and this ASX blue chip share
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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