Yesterday I looked at three ASX shares brokers have given buy ratings to this week.
Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here's why these brokers are bearish on them:
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A2 Milk Company Ltd (ASX: A2M)
According to a note out of Macquarie, its analysts have retained their underperform rating and $5.40 price target on this infant formula company's shares. The broker notes that smaller rival Bubs Australia Ltd (ASX: BUB) reported a strong rebound in sales in the first quarter. While this could be good news for A2 Milk, Macquarie appears to believe that investors should wait for an update from the company before getting too excited. It notes that an investor briefing is scheduled late this month. The A2 Milk share price is fetching $6.72 today.
Evolution Mining Ltd (ASX: EVN)
A note out of Goldman Sachs reveals that its analysts have retained their sell rating and cut their price target on this gold miner's shares to $3.70. Goldman believes that Evolution's shares are expensive in comparison to peers. In addition, the broker has been looking at commodities and has updated its price expectations. Goldman has reduced its average gold price estimate for 2021 to US$1,850 per ounce (from US1,890 per ounce). The Evolution share price is trading at $3.94 today.
Pact Group Holdings Ltd (ASX: PGH)
Analysts at Morgan Stanley have retained their underweight rating and $3.30 price target on this packaging company's shares. This follows the release of a trading update that disappointed the market earlier this week. Though, it was largely in line with what the broker was expecting. One thing that did surprise Morgan Stanley was the company's decision to cancel the sale of its Contract Manufacturing business. The broker was expecting the sale of the struggling business to be a positive catalyst. The Pact share price is now trading below this price target at $3.09.
