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 200 shares that have just been given sell ratings by brokers are listed below.

Here’s why these brokers are bearish on them:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

According to a note out of UBS, its analysts have retained their sell rating but lifted their price target on this medical device company’s shares to NZ$18.20 (A$17.09). While the broker acknowledges that Fisher & Paykel Healthcare will have been benefiting during the pandemic, it doesn’t appear convinced it will be as much as its share price implies. In light of this, it has retained its sell rating, largely on valuation grounds. The Fisher & Paykel Healthcare share price is trading notably higher than this price target at $26.84 this afternoon.

InvoCare Limited (ASX: IVC)

A note out of the Macquarie equities desk reveals that its analysts have downgraded this funerals company’s shares to an underperform rating and cut the price target on them to $10.20. Macquarie believes there is a risk of InvoCare falling short of expectations in FY 2020. It notes that its research is indicating that the company is losing market share. In addition to this, it suspects there will be lower deaths during the current flu season because of social distancing initiatives. The InvoCare share price is trading at $11.12 at the time of writing.

Regis Resources Limited (ASX: RRL)

Analysts at Ord Minnett have downgraded this gold miner’s shares to a sell rating with a $4.10 price target. According to the note, the broker made the move on valuation grounds after a strong share price gain over the last three months. Prior to today, the Regis share price was up over 130% in the space of just three months thanks to a strong gold price. Regis’ shares are currently changing hands for $5.08.

More reading

• Australian unemployment jumps to 7.1%
• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher
• Where to invest $5,000 in an irrational market
• Next phase of bull market could see ANZ Bank outperform Afterpay
• Is the Macquarie share price a solid buy today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare 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.

The post Top brokers name 3 ASX 200 shares to sell today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2zGuS4u

The Australian Finance Group Ltd (ASX: AFG) share price has leapt 16% this morning following the announcement the ACCC will grant clearance for its merger with rival Connective. Both businesses will become better positioned to invest in digital technologies and innovation in the face of digital disruption faced by the sector. 

What does AFG do?

AFG is one of Australia’s largest mortgage broking groups and was established in 1994. It began as a mortgage aggregator which provides mortgage brokers access to products and support. It now offers business finance, insurance products, and AFG-branded and securitised products throughout Australia. 

What is the Connective merger?

AFG proposed to merge with competitor, Connective. The combination would create Australia’s largest mortgage aggregator by a significant margin, accounting for almost 40% of Australia-operating mortgage brokers. More than half of all home loans written each year are initiated through the broker channel. 

After the merger, the AFG and Connective brands intend to operate separately. The transaction is also subject to court approval with a final decision likely in the second half of FY20. 

How is the AFG share price performing?

The AFG share price has more than doubled from its March low of 92 cents with shares currently trading at $1.96. AFG entered the S&P/ASX 300 (ASX: XKO) in the most recent quarterly rebalance due to this increase.   

AFG announced in its most recent update that April operating results had been strong. However, COVID-19 is expected to create some economic uncertainty. Lodgements and settlements could experience adverse effects on 1H FY21. Lodgements in the March quarter were up 33% on the previous corresponding period, driven by record-low interest rates. 

Nonetheless, residential settlements are expected to fall in coming months driven by a slowdown in broader economic activity. This will result in upfront commissions payments softening. Operating cash flow from existing trail commission arrangements on AFG’s $151.7 billion trail book will, however, continue. 

Foolish takeaway 

AFG’s merger will provide a strong base to benefit from an eventual recovery, despite the Australian mortgage market being expected to feel a downturn as a result of COVID-19. 

More reading

• Keep a watch on these 3 ASX trends next week

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. 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.

The post ASX stock of the day: The AFG share price surged 16% after merger clearance appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Y9A2zi