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:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Citi, its analysts have retained their sell rating and $7.15 price target on this infant formula and fresh milk company’s shares. The broker has been researching the China market and believes that consumers now have a preference for domestic brands. It fears this could impact demand in the key market. In addition to this, it suspects that excess inventory will have to be sold at a discount. This could put further pressure on daigou margins. The a2 Milk share price is currently fetching $7.68.
Afterpay Ltd (ASX: APT)
A note out of UBS reveals that its analysts have retained their sell rating and lowly $36.00 price target on this payments company’s shares. This follows the release of Afterpay’s third quarter update this week. While the company’s growth in the US and UK has impressed the broker, it notes that growth in the ANZ market is slowing. The broker also points out that the company’s North American operations are unprofitable with structurally lower margins. The Afterpay share price is trading at $122.52 on Thursday.
Pilbara Minerals Ltd (ASX: PLS)
Another note out of Citi reveals that its analysts have downgraded this lithium producer’s shares to a sell rating with a $1.10 price target. The broker made the move largely on valuation grounds after a strong rally over the last couple of months. In addition to this, it notes that the company fell short of shipment expectations during the March quarter and its costs were higher than expected. The Pilbara Minerals share price is down 9% to $1.13 on Thursday afternoon.
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More reading
- Why the A2 Milk (ASX:A2M) share price hit a multi-year low today
- Is the Afterpay (ASX:APT) share price a buying opportunity right now?
- High-flying ASX tech shares could fall another 90%: fundie
- 5 things to watch on the ASX 200 on Thursday
- Here’s why the Pilbara Minerals (ASX:PLS) share price is tumbling lower
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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