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:
Ampol Ltd (ASX: ALD)
According to a note out of Goldman Sachs, its analysts have retained their sell rating and $23.30 price target on this fuel retailer’s shares. Goldman was pleasantly surprised by Ampol’s announcement of a $300 million off-market share buyback. It thought the company may delay capital returns due to the difficult trading conditions and Lynton refinery closure. However, this isn’t enough for a change of rating by the broker. It continues to see value elsewhere and sees downside risk to consensus estimates. The Ampol share price is trading at $30.04 this afternoon.
Commonwealth Bank of Australia (ASX: CBA)
A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $68.50 price target on this banking giant’s shares. This follows news that APRA will reduce the banking giant’s operational risk overlay. While this is a positive and will lift its CET1 capital ratio well above APRA’s unquestionably strong benchmark, the broker continues to believe that the bank’s shares are overvalued at the current level. The Commonwealth Bank share price is fetching $80.95 on Tuesday.
Zip Co Ltd (ASX: Z1P)
Analysts at Citi have retained their sell rating and $6.55 price target on this buy now pay later provider’s shares. According to the note, the broker believes Zip is well-placed to deliver strong growth in the near term. This is expected to be driven by its increased investment in the US and UK markets, as well as the growing adoption of the payment method by merchants. However, the broker has concerns about increasing competition and the impact this could have on margins. In light of this, it feels there is downside risk to medium term estimates. The Zip share price is now trading below this price target at $6.29.
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More reading
- ASX 200 rises again on Monday
- Will the Liberty IPO damage the Commonwealth Bank (ASX:CBA) share price?
- Why Ampol, Cann, Fortescue, & Mesoblast shares are surging higher
- ASX 200 up 0.7%; Zip trading update, Ampol buyback, IAG sinks
- Zip Co (ASX:Z1P) share price pushes higher on trading update
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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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