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:
A2 Milk Company Ltd (ASX: A2M)
According to a note out of Citi, its analysts have retained their sell rating but lifted the price target on this infant formula and fresh milk company's shares to $12.30. Citi continues to believe that the market's margin expectations for the future are too optimistic and a2 Milk will need to increase its investment greatly to grow in China. Another concern the broker has is the increasing competition in the a2 category in the country. The a2 Milk share price is trading flat at $13.85 today.
Medibank Private Ltd (ASX: MPL)
Analysts at Goldman Sachs have retained their sell rating and $2.68 price target on this private health insurance company's shares. This follows the release of APRA private health insurance industry data for the September quarter. According to the note, the data shows that policyholder growth remains soft, while claims growth is picking up. It believes this is putting pressure on Medibank's margins and doesn't expect anything to change over the next couple of years. Medibank's shares are down 2.5% to $3.09 on Thursday.
Technology One Limited (ASX: TNE)
A note out of UBS reveals that its analysts have retained their sell rating but lifted the price target on this enterprise software company's shares to $7.25. According to the note, Technology One delivered a full year result ahead of its forecasts. However, the quality of its earnings was much lower than expected. And although it believes its outlook is positive, it isn't enough to make a change to its rating. Technology One's shares are currently changing hands at $8.80, which is 44x the broker's earnings estimate for FY 2020.
