Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.
Three sell ratings that caught my eye are summarised below. Here's why top brokers think investors ought to sell these shares next week:
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ARB Corporation Limited (ASX: ARB)
According to a note out of Macquarie, its analysts have downgraded this 4×4 accessories company's shares to an underperform rating but lifted their price target on them to $44.00. This follows the release of a very strong result for FY 2021, with its EBIT almost doubling. However, although its sees plenty of growth opportunities and expects a strong result in FY 2022, it isn't enough to stop the downgrade. Macquarie feels its valuation is stretched. The ARB share price ended the week at $51.47.
Coles Group Ltd (ASX: COL)
A note out of UBS reveals that its analysts have retained their sell rating and $16.50 price target on this supermarket operator's shares. UBS notes that Coles delivered a full year result in line with expectations in FY 2021. However, this wasn't enough for a change of rating. UBS continues to believe that Coles will struggle to gain market share and isn't convinced the cost savings it is targeting with its Smarter Selling strategy will underpin margin expansion. The Coles share price was fetching $18.72 at Friday's close.
Domino's Pizza Enterprises Ltd (ASX: DMP)
Analysts at Credit Suisse have retained their underperform rating but lifted their price target on this pizza chain operator's shares to $82.28. According to the note, the broker was pleased with Domino's performance in FY 2021 and notes that its guidance for new store openings has been upgraded. This has led to Credit Suisse increasing its estimates and price target accordingly. However, it still feels its shares are overvalued at the current level and has retained its underperform rating. The Domino's share price ended the week notably higher than this price target at $141.72.
