Housebuilders fall as Credit Suisse finds them fully valued

The bank today downgraded all four of its previous Buy recommendations — Barratt Developments, Bellway, Persimmon and Taylor Wimpey — saying it thinks shares are as high as they’re going to get.

“Underlying conditions in the UK market are clearly very strong now, but at current valuations we suggest the equity market is already pricing the ‘best of all possible worlds’,” analysts said in the note.

The bank added: “To be very clear, we are not calling the top of the actual UK housing cycle, but we are calling the top of the equity cycle.”

Barratt dug down 6.3p to 445.5p, Bellway slid 57p to 1632.5p, Persimmon was off 57p at 1412p and Taylor Wimpey tumbled 4.1p to 120.5p.

Liberum also urged caution on building materials group CRH, which was trading ex-dividend, in a note entitled “Recovery starts but is it quick enough?” CRH fell 49p to 1729.5p.

Aircraft parts provider Meggitt was on the up yesterday after sounding an upbeat note on the year ahead and raising its dividend. But it fell right back down today as the analysts weighed in to have their say. Deutsche Bank and JPMorgan followed Royal Bank of Canada and Société Générale in cutting their target price and Meggitt crash-landed 20.7p to 485.85p.

Insurer RSA was rising today, helped both by rumours that legendary US investor Warren Buffett has taken a stake and by an upgrade from HSBC. RSA climbed 1.85p to 97.75p.

China’s economic outlook hit Rio Tinto and BHP Billiton, two Australian-focused miners with big exposure to the mineral-hungry nation. Premier Li Keqiang said “painful structural adjustments” were in store as the country shifts towards consumer-driven growth and away from construction. Rio Tinto dropped 84p to 3297.75p and BHP Billiton slipped 31p to 1896p.

After yesterday’s equities rebound, the blue-chip index was more subdued today, off 30.66 points to 6793.11.

On the FTSE 250, sports rights group Perform continued its surge upwards after yesterday’s strategy update. The firm, which buys up the rights to stream sports matches online, soared 33.2p to 309.5p but is still a way off recovering the losses sustained after December’s profit warning.

Online gaming tech group Playtech was bottom of the mid-cap index after revealing that founder Teddy Sagi is selling a 10% stake in the company. The £212 million sell-off leaves Sagi with a 39% stake in Playtech, which develops software for betting firms such as Paddy Power. Playtech lost 60p to 754p.

Oil and gas explorer Soco International also fell after reporting a dip in revenues and earnings. Soco drilled down 34.3p to 428.6p.

Elsewhere, AIM-listed Independent Oil Gas was on the up after announcing a deal in the North Sea. The firm has acquired a licence for a site around 14 kilometres north-west of its Blythe field. IOG, up 2.5p to 27.25p, is calling the gas field Cronx.




Cantor Fitzgerald urges us to snap up Ashtead, saying the equipment rental business “is well placed to see further growth”. Shares are 846p; target is 960p.



DUMP Serco, Investec advises. The outsourcer’s full-year numbers “are a reminder of the difficult task new boss [Rupert Soiames] faces.” Shares are 450p; target is 310p.



Panmure Gordon advises keeping Berendsen. The textile firm is “making progress” and cash generation is “particularly good”. Shares are 1024p; target is 982p.


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