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:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating but lifted the price target on this banking giant’s shares to $61.50. The broker believes that its retail business could struggle in the near term and suspects this could lead to a sizeable dividend cut or even a deferral. The Commonwealth Bank share price ended the week at $68.68.

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 with a reduced price target of $10.20. Macquarie believes that InvoCare’s earnings could fall short of expectations in FY 2020 due to lower average case prices and social distancing initiatives reducing winter flu deaths. In addition to this, the broker suspects that it could be losing market share. InvoCare’s shares last traded at $11.36.

Treasury Wine Estates Ltd (ASX: TWE)

Another note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and cut the price target on this wine company’s shares to $9.30. The broker notes that consumers are turning their attention to value wines. It feels this shift to value could weigh on its margins in FY 2021. And while the reopening of restaurants should be a boost, it is concerned that Treasury Wine may have to discount its products to support its sales. The Treasury Wine share price ended the week at $10.69.

More reading

• Top brokers name 3 ASX 200 shares to buy next week
• Why the ultra-rich are hoarding gold
• 2 blue chip ASX 200 dividend shares to buy next week
• What is the price/earnings (p/e) ratio?
• 2 great value ASX 200 shares I’d buy next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. 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 next week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2CsO32P

Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of UBS, its analysts have retained their buy rating and NZ$22.00 (A$20.63) price target on this infant formula and fresh milk company’s shares. The broker has been looking at industry data and believes a2 Milk’s market share has held firm. As a result, it suspects there is upside risk to its earnings guidance. In addition to this, it appears confident on the future thanks to price increases and a potential new product launch. I agree with UBS and would be a buyer of a2 Milk’s shares next week.

Afterpay Ltd (ASX: APT)

Analysts at Ord Minnett have retained their buy rating and lifted the price target on this payments company’s shares materially to $64.70. According to the note, the broker believes Afterpay is well-positioned to take advantage of the accelerated shift to online shopping. It suspects there could be almost 10 million active customers using its platform by the end of FY 2020. I think Ord Minnett is on the money with Afterpay and feel it could be a top long term option.

Premier Investments Limited (ASX: PMV)

A note out of the Macquarie equities desk reveals that its analysts have upgraded this retail conglomerate’s shares to an outperform rating with an improved price target of $20.11. According to the note, the broker believes that Premier Investments is well-positioned for growth thanks to its strong brands and growing online sales. I think Macquarie is spot on and Premier Investments could be a great option for investors looking to gain exposure to the retail sector.

More reading

• Top brokers name 3 ASX 200 shares to sell next week
• Why the ultra-rich are hoarding gold
• Which shares to buy if the ASX tumbles
• 2 blue chip ASX 200 dividend shares to buy next week
• How to become a millionaire in 25 years with $20 a day

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. 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 buy next week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/37TmmvF

Relying on dividend shares for a passive income in retirement may become an increasingly likely scenario for many people. Low-interest rates mean that income-producing assets such as cash and bonds may be unable to provide a sufficient income to cover living costs in older age.

Clearly, dividend shares are riskier than many other mainstream assets. However, through holding cash for emergencies and identifying high-quality businesses, it may be possible to rely on dividend shares for a passive income in retirement.

The risks of holding dividend shares

Dividend shares experience price fluctuations like any other asset. However, capital returns may not be the main priority of retirees. They may be more focused on the level of income received from their portfolio. This could prove to be unreliable due to the risks faced by the world economy.

For example, many income shares have decided to reduce or cancel their dividends in response to the uncertain operating conditions they now face. A retiree who holds such companies will now experience a fall in their income in the short run. Although dividends may return among businesses who have delayed or cancelled, there are no guarantees that this will take place.

Therefore, relying on dividend shares for a passive income is a riskier strategy compared to holding lower-risk assets. There is always a chance that dividend cuts will negatively impact on your level of income.

Low relative returns

The problem facing retirees is that, in most cases, dividend shares offer a far superior income return than other mainstream assets. Low-interest rates mean that cash and investment-grade bonds may provide an insufficient level of income. Since policymakers may attempt to support the economy’s recovery through a loose monetary policy, the prospect of higher interest rates seems limited.

Building a portfolio for dividend shares

Therefore, many retirees may find that they focus their capital on dividend shares in order to generate a sufficient level of income. Should this be the case, buying a diverse range of businesses could help to lower your risks. You will be less reliant on a small number of companies to provide a passive income in retirement.

Similarly, purchasing companies with defensive business models and sound finances could further strengthen your passive income. They may be better equipped to survive an economic downturn, and therefore less likely to reduce their dividend payments.

Investors may also wish to hold cash to provide support and peace of mind should dividend cuts be ahead. This would also provide financial resources to overcome challenging economic periods that limit dividend-paying shares over a period of time.

More reading

• Top brokers name 3 ASX 200 shares to sell next week
• Top brokers name 3 ASX 200 shares to buy next week
• Why I’d buy cheap stocks in today’s market
• Where I would invest $50,000 into ASX shares immediately
• How I’d invest in today’s market to make a million

Motley Fool contributor Peter Stephens 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 Retirees: can you retire on just dividend shares? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3elhC4s