3 ASX 200 stocks rated a Strong Sell - what the brokers are saying

Another strong year for local equities has inevitably created a situation where some stocks now look overvalued, whether that's because they've run too hot, or have been dragged up by the rest of the market. 

While the outlook for the ASX and global stocks remains fairly bullish, there are three big ASX names that leading brokers are somewhat unanimous in calling overvalued. Using Market Index's broker consensus tool, these are the stocks currently rated a "Strong Sell".

To achieve a "Strong Sell" rating, a company needs to average a Sell (or equivalent) rating across all the major brokers for which we collect ratings. 

We've collated what the brokers are saying about these three stocks, along with their current ratings picture and their price potential - which is the difference between the current price and the broker consensus target price - to give you a sense of what the outlook is for each.

1. Commonwealth Bank of Australia (ASX: CBA)

• Buy ratings: 0
• Hold ratings: 0
• Sell ratings: 9 
• Potential: -25.17%

It's no surprise to see the current poster child of ASX overvaluation on this list. The most valuable company on the ASX has bemused many investors and fund managers after grinding higher for the last 24 months and remained a thorn in the side of value investors. 

What is interesting about CBA is it remains a robust and dominant business. It continues to show strong growth in housing credit and business lending (both around 6%), according to Macquarie analysis. 

In its Q1 trading update, released today, CBA reported fairly in-line results, with quarterly cash NPAT at $2.6 billion (1.9% miss) and operating income up 3% y/y. But net interest margin was down "due to the mix effects of strong growth in lower yielding liquid assets and institutional repos," according to the update. 

CBA shares were trading down 5.7% today, as investors arguably wanted more. As Morgan Stanley wrote in a recent note, "we think the bar for the majors is higher than it was earlier in the year given share price outperformance, higher P/E multiples, robust volume growth, good June quarter margin trends, benign credit quality, and 'self help' stories."

In a broker note today, Citi retained its Sell rating and suggested few surprises going forward, "given the quarterly was largely in-line, and with less disclosure provided than peers in recent days, we expect minimal forward earnings revisions." 

But Citi, in a separate note, did suggest that solid earnings could push CBA and other ASX banks higher, despite clear signs of overvaluation. "The only problem that we see with the banks at the moment are the multiples, which aren’t exactly cheap. But if we take this year as a guide, it is clear that earnings momentum could sustain the sector and override valuation concerns."

Unsurprisingly, CBA is currently rated a sell by all brokers in our records, with consensus price targets suggesting it still has 25% to fall before it reaches a "fair" valuation, even after today's drop. 

2. Bank of Queensland Ltd (ASX: BOQ)

• Buy ratings: 0
• Hold ratings: 3
• Sell ratings: 6
• Potential: -5.44%

Unlike its giant peer, Bank of Queensland faces much larger headwinds as it attempts to simplify its strategy whilst improving profitability and reducing costs. 

Like CBA, no brokers are currently rating BOQ a Buy, and broker consensus suggests a 5% drawdown from current prices. 

Macquarie rate BOQ an "underperform", and were fairly damning in its review of the bank's October results. "With only ~7-8% ROTE and limited prospect of making returns above its cost of capital, we see little reason to own it long term," it said in a note. 

Morgan Stanley said BOQ's recent results were "sound", with better-than-forecast revenue and strong business loan growth. But it didn't provide earnings guidance for FY26, as expected, and Morgan Stanley believes margins will be lower than predicted as a result. 

"[BOQ] had expected "stable margins" during FY25, but now sees "risks to the margin outlook" in FY26, mainly due to "continued elevated competition" for loans. In our view, this suggests downside to our margin forecast of 1.68% in FY26E vs 1.70% in 2H25."

It has retained BOQ as an "equal weight". 

UBS remain a Sell on BOQ, and noted BOQ was trading at a 2-yrs fwd PE of 12.2, slightly above its long-term average of 11.3. It has revised its price target upwards. 

3. Liontown Resources Ltd (ASX: LTR)

• Buy ratings: 1
• Hold ratings: 2
• Sell ratings: 6
• Potential: -35.85%

Battery minerals company Liontown Resources has enjoyed a stellar 2025 off the back of rallying lithium prices. The LTR share price is currently up 112% YTD, but still a distance off its 2023 all-time high.

Liontown is the only stock on this list to have a Buy rating, with Bell Potter have listed it a "speculative Buy" despite consensus showing huge downside potential (-31%). It pointed to certain tailwinds for LTR - improving lithium prices, strong balance sheet and the ramp-up of its Kathleen Valley project - as reasons for its buy rating. 

"Over FY26, LTR will de-risk the ramp up of Kathleen Valley," Bell Potter said in a note. "The company has a strong balance sheet with long tenor debt finance. LTR is highly leveraged to lithium markets, which we expect to improve."

It has been recently upgraded to a "neutral" by JPMorgan, but most other brokers have retained sell (or equivalent) ratings. Macquarie rate it as "underweight" - the only lithium miner to get that rating in Macquarie's coverage - with funding concern risks to its Kathleen Valley project and price movements for spodumene and lithium presenting risks to earnings. 

"Variations in our capital and operating cost assumptions as well as the ramp-up profile of both the open pit and underground mines also present risks for LTR," Macquarie wrote in a recent note. 

Do you agree with the brokers? Do you think they've got it wrong on any of these stocks? Let us know in the comments below.