Analyst ratings – sell
Amid these volatile times, some brokers have a bearish outlook on stocks with sell recommendations although views, as always, remain divided.
The three stocks below have been named by various brokers who are not overly positive about their performance.
Magellan Financial Group (ASX:MFG)
One of the most bearish outlooks is for Magellan Financial Group (ASX:MFG), an Australian investment manager focusing on global equities and global listed infrastructure.
UBS analysts have retained their sell rating and just a $7.00 price target on this fund manager’s shares as they hold firm to the belief that there are too many risks that are a downside for the company.
The reasons, according to UBS, are regarding fund outflows, concerns over staff retention, and a view that Magellan’s fees are too high and should be cut to reduce fund outflows. These factors, the analysts believe, are putting pressure on Magellan’s margins.
Considering the company closed trade yesterday (February 15) slightly down at $18.12, the $7.00 seems somewhat bearish.
Beach Energy (ASX:BPT)
As of market close yesterday, Macquarie analysts had downgraded energy producer Beach Energy’s (ASX:BPT) rating to underperform with an improved price target of $1.50.
Its shares were struggling after the release of a half-year results which announced the company missed earning per share (EPS) estimates.
Beach Energy’s share price has soared more than 16% since January 4 amid broader sector strengths, however while Macquarie has upgraded its earnings forecasts and price target to reflect production growth, analysts believe investors would fare better with other, cheaper options.
The Beach Energy share price plummeted yesterday almost 10.5% to close trade at $1.455.
Insurance Australia Group (ASX:IAG)
Multinational insurance company IAG surprised the market with the upside of its half-year results yet Morgan Stanley analysts were yesterday bearish on the company and kept their underweight rating.
Morgan Stanley believes there are risks that are not being accurately priced in by the market, particularly with claims inflation, however it lifted IAG’s price target to $3.90.
For FY22, IAG reported its insurance margin guidance (10%-12%) was reaffirmed, while FY22 GWP growth expectations were lifted to mid-single-digit vs previously low-single-digit. Analysts at Morgans viewed this result as a pass mark versus modest expectations and moved to a hold recommendation.
The IAG share price yesterday closed up to $4.74.
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