On Monday I looked at three ASX shares that have been given buy ratings by leading brokers this week.
Unfortunately, not all shares are in favour with brokers right now. The three shares listed below have all just been given sell ratings. Here's why:
Aveo Group (ASX: AOG)
According to a note out of the Macquarie equities desk, its analysts have retained their underperform rating and cut the price target on this retirement communities company's shares to $1.61 following its disappointing trading update on Monday. Aveo's guidance has fallen well short of the broker's expectations. Combined with headwinds that are building, its analysts expect Aveo's shares to continue to underperform. The Aveo share price is down 1.5% to $1.93 in early afternoon trade on Tuesday.
Metcash Limited (ASX: MTS)
A note out of Citi reveals that its analysts have retained their sell rating but lifted the price target on this wholesale distributor's shares to $2.60. According to the note, although the broker has lifted its forecasts to reflect the timing of cost initiatives, it remains bearish on the company due to concerns over increasing competition for its businesses. Its analysts suspect that its Hardware segment could be impacted by customer losses and a deteriorating macro environment, amongst other things. The Metcash share price is down 5% to $2.70 on Tuesday.
South32 Ltd (ASX: S32)
Analysts at Goldman Sachs have retained their sell rating and trimmed the price target on this mining giant's shares to $3.10 following a site visit last week. According to the note, the broker made the move after South32 revealed that the capex for its Appin colliery at the Illawarra coking coal complex would be ~$1 billion, which was far more than Goldman had forecast. Its analysts also have doubts over its production targets. South32's shares are trading slightly higher at $3.25 this afternoon.
