On Monday 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 that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating and lifted the price target on this banking giant’s shares to $89.50. Morgan Stanley notes that CBA appears to be winning in business banking, with above-system volume growth and good margin management potentially supporting pre-provision profit growth for the first time in four years. In addition to this, the broker points out that the bank’s balance sheet is very strong. However, despite all the many positives, Morgan Stanley can’t look beyond its stretched valuation and holds firm with its underweight rating. The CBA share price is fetching $99.11 this afternoon.

Qantas Airways Limited (ASX: QAN)

Analysts at Credit Suisse have retained their underperform rating and $4.15 price target on this airline operator’s shares. According to the note, the broker has been looking at rival domestic routes. It suspects that the increasing competition will offset some of the benefits from the $1 billion cost savings Qantas is making. In addition to this, Credit Suisse believes the company will need to invest heavily in its aircraft due to its ageing fleet. The Qantas share price is trading at $4.70 today.

Zip Co Ltd (ASX: Z1P)

A note out of UBS reveals that its analysts have retained their sell rating and $6.75 price target on this buy now pay later (BNPL) provider’s shares. According to the note, the broker believes that the company’s expansion into mainland Europe and the Middle East will provide it with a significant market opportunity. However, it notes that its acquired businesses are at a relatively early stage and could require significant capital in order to scale up. The Zip share price is fetching $7.16 on Tuesday afternoon.

More reading

• Why the Zip (ASX:Z1P) share price is volatile today
• ASX 200 up, Zip rises, Aristocrat Leisure reports
• Is the Zip (ASX:Z1P) share price in the buy zone?
• The Commonwealth Bank (ASX:CBA) share price hits new record highs
• Why Corp Travel, Domino’s, Kogan, & Zip shares are storming higher

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The Tabcorp Holdings Limited (ASX: TAH) share price is finding renewed support on rumours that it will get another marriage proposal.

It’s nice to be wanted by so many! This time, the lottery and wagering group could be wooed by wagering technology provider Betmakers Technology Group Ltd (ASX: BET).

The speculation doing the rounds this time is that Betmarkers’ advisor and bigwig bookie Matthew Tripp is close to making an offer for Tabcorp, reported The Australian.

Tabcorp merger with Betmaker could unlock $5bn in value

The article didn’t name any sources but it claimed that Tripp is working with Goldman Sachs to engineer a merger between the two.

The transaction could unlock $5 billion in value for shareholders in the combined entity, according to The Australian.  

Betmaker share price punt already in the money

Tripp owns around 92 million shares of Betmakers, including his performance rights. He bought the sizable stake in February this year for around $25 million and he’s already well in the money.

Tripp’s investment is worth close to $100 million given that the Betmakers share price jumped over 4% today to $1.55 on the takeover rumour.

It’s understood that Tripp’s initial approach to Tabcorp over Christmas last year was rebuffed.

Tabcorp share price bolstered by two other bids

Tabcorp is already being pursued by two others. Ladbrokes owner Entain made a $3.5 billion proposal to buy Tabcorp’s Wagering and Media unit.

Meanwhile, Apollo Global Management put forward a $4 billion deal to buy Tabcorp save for its lotteries business.

Things won’t be the same for the Tabcorp share price

It looks likely that Tabcorp won’t survive in its current form given that a number of key shareholders are unhappy with its performance.

The story is not unlike the debacle facing the Crown Resorts Ltd (ASX: CWN) share price, although not as controversial. Coincidentally, Crown is mulling a merger with rival the Star Entertainment Group Ltd (ASX: SGR) share price.

Tabcorp is working with UBS on the best option to unlocking value for shareholders. Management is expected to provide a game plan to investors on June 30.

Besides contemplating a merger or the sale of all or part of the group, Tabcorp could also spin-off its Wagering and Media division into a separately listed ASX entity.

Betmakers market cap stands at around $1.3 billion compared to Tabcorp’s $11.3 billion market value.

More reading

• Why the BetMakers (ASX:BET) share price lifted higher today
• ASX winners and losers from the Victorian budget
• Crown (ASX:CWN) share price lifts on acquisition rejection
• The latest ASX shares that top brokers have upgraded to “buy”
• ASX 200 Weekly Wrap: After record high, ASX dips on inflation fears

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The Straker Translations Ltd (ASX: STG) share price is putting a smile on the faces of shareholders today. Shares are surging off the back of the language services company’s outlook update.

At the time of writing, the Straker Translations’ shares are up 10.83% to $2.00.

A ‘transformational’ year

Investors are scrambling to get a hold of Straker Translations shares this morning following the company’s update. In the release, the company points to a strong outlook for the 2022 financial year. This is thanks to its leadership in the consolidating global language services sector.

Straker also touched on its performance highlights for FY21, these included:

• Revenue increase of 13% to $31.3 million for year ending March 2021
• On a proforma basis, unaudited revenue tops $41 million for FY21
• Lingotek acquisition delivers $1.9 million in revenue within two months of integration.
• Net losses after tax increase to $6 million from $2.5 million.

These results were previously published in April. However, now they are audited and official.

The big-ticket item for Straker is its appointment as strategic translations provider to IBM (NYSE: IBM).

Additionally, the acquisition of US-based Lingotek has also been described as ‘transformational’ for the company. The deal has added $11 million in annual incremental revenue for Straker.

Positive outlook lifts Straker Translations share price

Notably, Straker advised it forecasts revenue for 2022 financial year to exceed $50 million with an improved gross margin.

The company reasons there is a growing recognition among enterprise customers of Straker’s global reach and the benefits of its RAY translation platform. Furthermore, the inclusion of Lingotek pushes the company’s proforma revenue to $41.2 million – representing a 48% increase on the prior year.

Commenting on the update, Chief Executive and Co-Founder Grant Straker said:

Our strategic priorities are clear. We are focused on driving consolidation in the translation sector, building repeating revenues – particularly among the large global enterprises that benefit from Straker’s global reach and our Ai-Powered RAY translation platform – and continuing to consolidate our technological leadership.

While the company suffered challenges from COVID-19, it believes it is also creating opportunities. Considering the deferral or cancellation of work has weighed more so on smaller translation companies, this has put more pressure on the consolidation of the industry.

More reading

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• The Straker (ASX:STG) share price is rocketing 13% today

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The Zip Co Ltd (ASX: Z1P) share price is having a bit of a mixed day on Tuesday.

In early afternoon trade, the buy now pay later (BNPL) provider’s shares are back in the blavk and up 1% $7.17.

Why is the Zip share price bouncing around?

The Zip share price appears to have come under a little bit of pressure today following a mixed reaction to its expansion announcement on Monday.

In case you missed it, Zip has announced that it is expanding into the European and Middle East markets via the acquisitions of established player in both markets.

In Europe, Zip will acquire the shares it doesn’t already own in Twisto Payments for 89 million euros (~A$140 million). Whereas in the Middle East, the company is acquiring the shares it doesn’t already own in UAE-based Spotii for US$16 million (~A$21 million). This will give Zip access to a $1.1 trillion annual ecommerce market in Europe and a Middle East market that is growing fast.

The acquisition of Spotii is expected to complete in the third quarter of calendar year 2021, whereas the Twisto acquisition is expected to complete in the fourth quarter.

What was the reaction?

Analysts at UBS have been running the ruler over Zip’s plans and sees both positives and negatives.

According to the note, the broker wasn’t surprised with the acquisitions and acknowledges that the two markets provide the company with significant growth opportunities.

However, it believes the businesses will require significant amounts of capital in order to scale.

Its analysts commented: “While the potential total addressable market for both businesses is large, both businesses are relatively early stage, we also highlight the capital intensity of both businesses if they are to scale.”

This could mean that another capital raising will be required in the not so distant future in order to grow these businesses.

Unfortunately, as we have seen previously with the Zip share price, capital raising speculation often weighs on investor sentiment and could potentially limit the upside from here for the time being.

More reading

• ASX 200 up, Zip rises, Aristocrat Leisure reports
• Is the Zip (ASX:Z1P) share price in the buy zone?
• Why Corp Travel, Domino’s, Kogan, & Zip shares are storming higher
• ASX 200 up 0.1%: Aristocrat results, Zip’s global expansion continues
• Zip (ASX:Z1P) share price higher on European and Middle East expansion news

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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. The benchmark index is currently up 0.6% to 7,089.6 points.

Here’s what is happening on the market today:

TechnologyOne half year results

The TechnologyOne Ltd (ASX: TNE) share price is having a mixed day following the release of its half year results. At one stage in morning trade, the enterprise software company’s shares were up as much as 9%. They have since pulled back and are now trading flat. Strong demand for its Global SaaS ERP Solution underpinned a 5% increase in total revenue to $144.3 million and a 48% increase in net profit to $28.2 million. However, full year profit growth is expected to be 10% to 15%.

Iron ore miners rise despite pullback

Iron ore producers BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) are all pushing higher today despite another pullback in the price of the steel making ingredient. According to Metal Bulletin, the spot iron ore price fell a further 4.1% to US$192.42 a tonne. Each of the mining giants are outperforming the market today with gains of at least 1%.

Aristocrat Leisure rated as a buy

The Aristocrat Leisure Limited (ASX: ALL) share price is pushing higher after several brokers responded positively to its half year results yesterday. One of those was Citi, which retained its buy rating and lifted its price target to $46.60. Also remaining positive was UBS, which has held firm with its buy rating and lifted its price target to $44.40.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Galaxy Resources Limited (ASX: GXY) share price with a 4% gain. This is despite there being no news out of the lithium miner. The worst performer has been the Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price with a 3% decline. Investors may be nervous ahead of its full year results release later this week.

More reading

• TechnologyOne (ASX:TNE) share price on watch after reporting strong first half growth
• 4 ASX shares every investor should consider adding to their portfolio: fundie
• Is the Aristocrat Leisure (ASX:ALL) share price in the buy zone after its results?
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 up, Zip rises, Aristocrat Leisure reports

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The Doctor Care Anywhere Ltd (ASX: DOC) share price is racing higher today following a new agreement with Nuffield Health.

Founded in 1957, Nuffield Health is the largest not-for-profit healthcare organisation in the United Kingdom. The group operates 31 hospitals, 113 health fitness and wellbeing gyms, and over 200 workplace wellbeing services.

At the time of writing, Doctor Care Anywhere shares are fetching for 91 cents, up 11.73%.

What’s driving the Doctor Care Anywhere share price higher?

Doctor Care Anywhere shares are lifting off today as investors appear upbeat about the company’s prospects.

According to its release, Doctor Care Anywhere advised it has signed a Head of Terms with Nuffield Health.

A Heads of Terms is a non-binding document that outlines the details of a proposed agreement. This can include a tentative sale, partnership, or other arrangement. Traditionally, a Head of Terms consists of target completion date, pre-conditions to the agreement, and the parties’ key obligations.

Under the Head of Terms, Doctor Care Anywhere will develop a digitally integrated virtual and in-person primary care service for Nuffield Health. The platform will allow patients to have access to Doctor Care Anywhere’s 24/7 virtual general practitioner service. In addition, users can also tap into Nuffield Health’s nationwide network of face-to-face general practitioners.

The all-in-one digital platform aims to be the first nationally integrated primary care proposition in the United Kingdom. It is estimated that over 70% of all primary care consultations can be conducted over virtual appointment. However, with integration of the in-person service, this enables patients to choose how, when and where they access primary care. Furthermore, the platform provides an expanded offering of other clinical services which can be booked, reviewed and followed up on.

The platform is expected to be launched sometime in Q4 2021. Pre-marketing to Nuffield Health’s network of 1,600 corporate clients is anticipated to begin as soon as possible.

Doctor Care Anywhere noted that it will announce more details to the ASX when the contract is signed.

Management commentary

Nuffield Health medical director, Dr Davina Deniszczyc welcomed the collaboration, saying:

We are delighted to be strengthening our partnership with Doctor Care Anywhere to offer customers access to a national network of virtual and face-to-face GPs. The pandemic has demonstrated the need for accessible health services and through this partnership we are now able to offer everyone the choice of how they access their GP, whenever they need to.

Doctor Care Anywhere founder and CEO, Dr Bayju Thakar added:

We’re very excited to be providing the first joined-up healthcare journey of this kind in the UK and to be deepening our partnership with Nuffield Health. This new collaboration, the first joined up service of its type in the UK, will bring the benefits of digital healthcare to the face-to-face primary care setting and allow individuals more control over how, where and when they choose to access primary care services.

This represents a true shift in how healthcare can and should be delivered on a national scale and at a time when there is huge pressure on primary care systems across the UK offers real improvements in terms of convenience, cost and quality of the care experience.

Despite today positive release, the Doctor Care Anywhere share price has fallen around 25% year-to-date.

More reading

• Why Doctor Care Anywhere, Next Science, NIB, & Talga are charging higher
• Doctor Care Anywhere (ASX:DOC) share price lifts on upbeat update

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The Carbon Revolution Ltd (ASX: CBR) is careening to a 14-month low this morning after it issued a profit downgrade.

The irony is that the surge in car sales is leaving the composite wheel maker behind in the dust, and you can thank COVID-19 for that.

The Carbon Revolution share price crashed 13.5% to $1.34 at the time of writing. The fall is on top of yesterday’s 5.5% tumble – all of which came right at the market close.

Cardon Revolution share price is a wreck

This is because management released the disappointing news a few minutes before 4pm. It revealed that one of its major customers have suspended vehicle production due to the shortage of computer chips.

As a result, Carbon Revolution believes it will sell around 1,800 fewer wheels this financial year compared to FY20.

Management had previously forecast selling around the same number of wheels in FY21 as last year.

The customer in question is expected to restart its production line in late June.

Carbon Revolution share price in the slow land

The world-wide shortage of semi-conductor chips is driving up the price of vehicles around the world, including Australia.

The shortage of new vehicles has been met head-on with strong demand for cars. Consumers who can’t travel and have limited alternative uses for their savings are spending big on new wheels.

The federal government is also pumping fuel into the tank. The extension of the instant tax write-off is also adding to demand for new vehicles.

ASX shares benefiting from car shortages

This is great news for the likes of the Eagers Automotive Ltd (ASX: APE) share price and Autosports Group Ltd (ASX: ASG) share price.

The lack of supply means car dealers do not have to offer discounts on new vehicles and can charge more for second hand vehicles that are ready for immediate delivery.

Auto parts makers are also smiling. The Bapcor Ltd (ASX: BAP) share price and ARB Corporation Limited (ASX: ARB) share price have also been outperforming over the past year.

Foolish takeaway

The supply chain dislocation is creating winners and losers in the auto industry. New car manufacturers and their suppliers are suffering, while dealers are revving up their engines.

But at least the headwind is temporary. It’s a question of “when” and not “if” supply chains normalise to give the Carbon Revolution share price a chance to play catch-up.

On the other hand, the road to recovery could be a winding one. Just look at the ongoing impact of COVID-19 even when vaccines are being rolled out. Ask anyone in Victoria.

More reading

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• The ASX shares poised to benefit from new spending in the 2021 federal budget

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The BPH Energy Ltd (ASX:BPH) share price is rising this morning after the company released more news of the Baleen gas prospect.

The BPH Energy share price is up 7.78% to 9.7 cents at the time of writing.

What did BPH Energy announce today?

BPH Energy advised that its investee company, Advent Energy Ltd, has appointed Xodus Group to prepare a submission for the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

BPH Energy holds a 26% stake in Advent Energy. Advent Energy’s major shareholders also include MEC Resources Limited (ASX: MMR) and the de-listed Grandbridge Limited.

Xodus will prepare an environmental plan for activities at the Baleen prospect to be presented to NOPSEMA.

Let’s take a closer look at today’s news.

Next step forward

Before the Baleen prospect can begin, it must receive the go-ahead from NOPSEMA.

NOPSEMA must assess a company’s health, safety, and environmental plans before any offshore petroleum or greenhouse gas storage activities can begin.

Last week, the BPH Energy share price soared when the company announced there’s a high likelihood of striking gas at the Baleen prospect.

The company also hopes to use the site for carbon capture and storage, which could see it receiving Federal Government incentives.

The Baleen prospect is found within offshore licence PEP-11 ­– located off the coast of Newcastle.

PEP-11 is to be developed as a joint venture between Advent Energy and Bounty Oil & Gas NL (ASX: BUY). Advent holds 85% of the licence, while 15% is held by Bounty.

Xodus has been appointed under a lump sum contract. The cost that Advent Energy will pay Xodus to prepare the environmental plan is yet to be disclosed.

BPH Energy share price snapshot

The BPH Energy share price is having a fantastic 2021 on the ASX.

Currently, it is up 142% year to date. It has also gained 870% since this time last year.

The company has a market capitalisation of around $59 million, with approximately 664 million shares outstanding.

More reading

• BHP (ASX:BHP) share price ends lower amid continuing China trade woes
• Here’s why the BPH Energy (ASX:BPH) share price is up 22% today

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The Viva Leisure Ltd (ASX: VVA) share price is climbing today following an update on its trading performance and FY21 outlook.

At the time of writing, health club operator’s shares are swapping hands for $1.94, up 0.52%.

Let’s take a closer look and see what the company updated the ASX with.

Performance update

Investors are pushing Viva Leisure shares higher after the company released a positive update.

In its presentation, Viva Leisure announced an improvement across the business due to the gradual recovery from the COVID-19 pandemic.

As a result, the business noted that all comparisons made below are against its December half-year result. This is because comparing against 12 months ago is not an accurate reflection on business growth.

For the period until April 2021 (first 4 months of 2021), monthly revenue run rate (RRR) jumped to $8.1 million. This represents a 11.4% increase on its December half-year results. All of Viva Leisure’s facilities were re-opened as of January 2021, highlighting a return of members.

In addition, the company managed to also grow its member base to 295,808 members, a lift of 8% on H1 FY20. Viva Leisure’s continued expansion into new locations increased to 306. This figure is up from 296, which contributed to the improved result.

Revenue surged above $8 million. This is a 58% jump when comparing this month against March 2020, before COVID-19 hit. Particularly, the ACT region was the biggest contributor to the overall scorecard, accounting for roughly 45%.

FY21 outlook

Looking ahead, Viva Leisure stated that it is targeting revenue to range from $81 million to $83 million. Over H1 FY21, this is a 25.6% to 31.2% growth.

Furthermore, earnings before interest, tax, depreciation and amortisation (EBITDA) is estimated to come between $13 million to $13.5 million. This reflects a 32.1% to 41.1% increase on the December half-year result. EBITDA margin is also set to jump around 16.5% to 17.5%.

About the Viva Leisure share price

The Viva Leisure share price is down close to 20% over the past 12 months. It’s worth noting that its shares plunged to a low of 1.825 due to market slump this month.

Based on the current share price, Viva Leisure commands a market capitalisation of roughly $158 million.

More reading

• Viva Leisure (ASX:VVA) share price tanks 9% on impending lawsuit

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The CSL Limited (ASX: CSL) share price is pushing higher on Tuesday morning.

At the time of writing, the biotherapeutics giant’s shares are up 1% to $292.00.

Why is the CSL share price rising today?

The CSL share price was given a boost by a broker note out of the Macquarie Group Ltd (ASX: MQG) equities desk this morning.

According to the note, the broker has retained its outperform rating and $312.00 price target on the company’s shares.

This price target implies potential upside of approximately 7% over the next 12 months.

What did Macquarie say?

Macquarie has been leveraging Google data to track foot traffic at the company’s network of plasma collection centres during the pandemic.

Positively, the latest data indicates that foot traffic has now risen to the highest level since Macquarie began tracking it. This coincides with a reduction in new COVID-19 cases in the US and the successful rollout of vaccines across the country.

Macquarie’s analysts believe this improving collections data is supportive of its immunoglobulin revenue and earnings growth forecasts.

In addition to this, the broker notes that CSL’s new plasmapheresis platform, which is being developed with Terumo Blood and Cell Technologies, has the potential to lift yields meaningfully.

The broker believes the innovative plasma collection platform could increase yields by 10% per donation in the future, which would give its gross profit a big boost if granted regulatory approval.

Who else is bullish?

Macquarie isn’t the only broker that is positive on the CSL share price. A number of other brokers also have the equivalent of buy ratings on its shares.

For example, Credit Suisse has an outperform rating and $315.00 price target on its shares and UBS has a buy rating and $330.00 price target.

The latter implies potential upside of 13% for the CSL share price over the next 12 months.

More reading

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• Expert says buy these ASX expensive defensives as market momentum is peaking
• Is the CSL (ASX:CSL) share price good value?
• ASX 200 Weekly Wrap: ASX whipsaws in volatile week
• 2 five-star ASX shares that analysts love

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