Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

According to a note out of Citi, its analysts have retained their sell rating and $47.80 price target on this pizza chain operator’s shares. Although the broker took away a number of positives from its CEO Webcast last week, it wasn’t enough for a change of rating. Citi appears concerned that its new store openings could suffer because of the pandemic. If this leads to lower than expected earnings growth, it fears it could lead to a de-rating to lower multiples. The Domino’s share price ended the week at $62.70.

JB Hi-Fi Limited (ASX: JBH)

Analysts at Credit Suisse have downgraded this retailer’s shares to an underperform rating with an improved price target of $34.52. According to the note, although it is pleased with its performance during the pandemic, the broker believes JB Hi-Fi’s shares have run too hard. It notes that its shares are trading at a significant premium to peers and fears the market may be expecting too much from the company once government support ends. The JB Hi-Fi share price was last trading at $40.00.

Webjet Limited (ASX: WEB)

A note out of Morgan Stanley reveals that its analysts have downgraded this online travel agent’s shares to an underweight rating with an improved price target of $3.30. The broker points out that Webjet’s shares may still be down materially this year, but its market capitalisation was actually trading at pre-pandemic levels. This is because of its highly dilutive capital raising. Whereas the Corporate Travel Management Ltd (ASX: CTD) market capitalisation is notably lower than its pre-pandemic level despite not raising capital. It prefers the corporate travel specialist and has an overweight rating on its shares. Webjet’s shares ended the week at $3.95.

More reading

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• The latest ASX shares to be hit by broker downgrades to “sell” today
• ASX 200: improved consumer sentiment to near pre COVID-19 levels
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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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