On Monday I looked at three shares that have found favour with brokers and been given the highly coveted buy rating.
Not all shares are in favour right now, though. The three shares listed below have just been given the unwanted sell rating. Here's why these leading brokers are bearish on them:
Adelaide Brighton Ltd (ASX: ABC)
According to a note out of UBS, it has retained its sell rating and cut the price target on this building products company's shares to $4.20 after its surprise profit downgrade at the end of last week. The broker cut its price target after Adelaide Brighton reduced its first half profit guidance to between $188 million and $195 million from between $200 million and $210 million. The broker had previously warned that the company's exposure to residential building activity could lead to a decline in residential cement volumes.
Bank of Queensland Limited (ASX: BOQ)
Analysts at Morgan Stanley have retained their underweight rating and $9.50 price target on this regional bank's shares after it advised that it has terminated the sale of its St Andrew's Insurance business to Freedom Insurance Group (ASX: FIG). According to the note, the broker suspected that there was a risk this could happen. It now appears concerned that any potential capital management initiatives in the near future may be on hold unless the business can be successfully offloaded to someone else.
Hotel Property Investments Ltd (ASX: HPI)
A note out of Goldman Sachs reveals that its analysts have retained their sell rating and cut the price target on this property investment company's shares to $2.92. According to the note, although the Hotel Property Investments share price is down 4% year to date and is underperforming the ASX200 A-REIT index, Goldman believes there is further downside to come due to its limited earnings growth potential through to FY 2021. In addition to this, the broker doesn't believe it deserves to trade at a 15% premium to its reported NTA. As a comparison, its A-REIT peers trade at a 4% premium.
