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 that have just been given sell ratings are listed below. Here's why these brokers are bearish on them:
Adelaide Brighton Ltd (ASX: ABC)
According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $3.00 price target on this building materials company's shares. Although Adelaide Brighton delivered a half year result that was ahead of the broker's estimates, it isn't enough for a change in recommendation. Morgan Stanley remains concerned by the major headwinds the company is facing and suspects that earnings could decline again in FY 2020. The Adelaide Brighton share price is down 3.5% to $3.04 on Thursday afternoon.
Nanosonics Ltd (ASX: NAN)
Analysts at Citi have retained their sell rating and $4.40 price target on this infection control specialist's shares following its full year results. According to the note, the broker continues to believe that its shares are overvalued and at risk of a sharp pullback over the next 12 months. Citi expects Nanosonics to achieve earnings per share of 5.1 cents in FY 2020, which means its shares are changing hands at 125x earnings at present. The Nanosonics share price is down slightly to $6.39 on Thursday.
Virgin Australia Holdings Ltd (ASX: VAH)
A note out of Credit Suisse reveals that its analysts have downgraded this airline's shares to an underperform rating and slashed the price target on them to 10 cents. According to the note, whilst the broker believes that its cost cutting initiatives will lead to an improvement in its performance, it may not be for a few years. In light of this, it feels its shares are overvalued and has downgraded them to reflect this. The Virgin Australia share price is trading flat at 15.5 cents on Thursday.
