On Wednesday 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 ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:
AGL Energy Limited (ASX: AGL)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $9.28 price target on this energy company’s shares. The broker has been looking at the company’s separation plans and suspects it may find limited investor appetite for its generation business. And while it sees the retail operations as a more attractive option for investors, it isn’t enough for a positive overall rating. The AGL share price is trading at $9.38 on Thursday.
Galaxy Resources Limited (ASX: GXY)
Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $1.80 price target on this lithium miner’s shares. This follows the release of an update on its Sal de Vida operation this week. Although the broker was pleased with the update, it believes everything is already factored into the current Galaxy share price. In light of this, it isn’t in a rush to change its rating. The Galaxy share price is fetching $3.59 at the time of writing.
Zip Co Ltd (ASX: Z1P)
Analysts at UBS have retained their sell rating but lifted their price target on this buy now pay later (BNPL) provider’s shares to $6.50. According to the note, the broker was pleased with Zip’s strong growth during the third quarter. However, it isn’t enough to become positive on the company. UBS notes that Zip is still a relatively early stage investment with significant execution risks. In addition to this, it notes that BNPL providers have benefited greatly from COVID-19 stimulus. It has concerns about what will happen when stimulus is wound back by governments. The Zip share price is trading at $9.47 today.
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More reading
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- Strike Energy (ASX:STX) goes into trading halt for $80m cap raise
- Zip (ASX:Z1P) share price sinks lower after $400m notes offering
- Why the IOUpay (ASX:IOU) share price is up 15% this week
- Is the Klarna / Flybuys partnership the future for ASX BNPL providers?
James Mickleboro owns shares of Galaxy Resources Limited. 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. 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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