Crest Nicholson Holdings PLC up to buy as Jefferies says UK housebuilders a
The broker said the company was seeing a “strong selling rate” and that a “more upbeat view on the underlying margin of the land bank” had driven “meaningful upgrades”
Holdings PLC () has been upgraded to ‘buy’ from ‘hold’ by analysts at Jefferies, who said the UK housebuilding sector was “a strong play on UK recovery” as the coronavirus (COVID-19) pandemic receded.
In a note on Monday, the broker also hiked its target price for the firm to 474p from 358p, saying the company was seeing a “strong selling rate” and that a “more upbeat view on the underlying margin of the land bank” had driven “meaningful upgrades”.
READ: Crest Nicholson ups profit target as housing market stays strong
Jefferies also raised their target price for () to 751p from 715p and reiterated their ‘buy’ rating, saying the company was the “cheapest stock in the sector” and that evidence of a step up in land buying in the second half of 2021 “ought to drive confidence in a stronger recovery in volumes, despite the group’s exit from London”.
“This, combined with the upside potential to gross margins which remains a long way short of previous levels for the group, we believe offers some of the most meaningful upgrades in the sector”, the broker added.
Jefferies was less optimistic on (), which was downgraded to ‘hold’ from ‘buy’ while its target was raised to 3,820p from 3,677p, as the broker said there was “better risk/reward elsewhere” after a strong share price performance.
“With a share price up 22% in the past month, Bellway…while still inexpensive, lacks the power of valuation argument of others”, Jefferies said.
“While volume forecasts remain short of seeing the group reach its completions capacity, after three upgrades to guidance in the past four months and forecast margins not far from intake levels prior to COVID, we see the share price momentum taking a pause for breath”, they added.
Jefferies also altered its assessment for (), which saw its target price lifted to 1,252p from 1,146p and maintained at ‘buy’.
Crest Nicholson shares climbed 2.9% to 413.6p in lunchtime trading, while Redrow rose 0.7% to 636.5p, Bellway fell 0.6% to 3,442p and Vistry was flat at 1,089p.
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