JP Morgan is upbeat on prospects for builders; upgrades Taylor Wimpey

JP Morgan Cazenove is broadly positive on the building sector, which it says is trading below its long-term average.

It highlighted (), Redrow () and Bellway () as its top picks.

In a note to clients, it also upgraded () to ‘overweight’, pointing out it has the “highest upside to consensus”.

, meanwhile, was cut to ‘neutral’ by the bank’s analysts, after its recent “good performance”.

The stock has advanced 58% since hitting its low at the end of October.

In a companion note, JPMC assessed the potential financial impact of government intervention in the wake of the Grenfell tragedy on issues around cladding. 

The bank reckons the proposed £2bn levy would likely result in a 2-4% additional tax.

“While we are still awaiting further details, we note that this is partly discounted already and unlikely to be a major concern.