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 they are bearish on them:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Citi, its analysts have downgraded this infant formula company's shares to a sell rating and cut the price target on them to $12.20. Its analysts believe that the market is expecting too much from a2 Milk Company and fears that margin pressures will mean it could fall short of expectations. The broker also has concerns over growth in the daigou channel due to increasing competition. The a2 Milk Company share price is down over 2% to $12.35 on Tuesday.
Fortescue Metals Group Limited (ASX: FMG)
Analysts at Morgan Stanley have downgraded this iron ore producer's shares to an underweight rating but lifted the price target on them slightly to $7.85. According to the note, the broker made the move on valuation grounds after a strong share price rise. In addition to this, Morgan Stanley believes that iron ore prices could come under pressure next year as supply increases. Fortescue's shares are down 3% to $8.70 today.
Whitehaven Coal Ltd (ASX: WHC)
A note out of Goldman Sachs reveals that its analysts have retained their sell rating and cut the price target on this coal miner's shares to $2.70. According to the note, the broker continues to be bearish on Whitehaven following its inaugural investor day. Although the miner revealed a plan to increase its production from 20-21Mt to 35-40Mt by FY 2030, this had already been factored into Goldman's valuation. Whitehaven Coal's shares are down 4% to $3.11 this afternoon.
