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Prices & Quotes - UK Markets - Crest Nicholson Holdings (CRST)

Risk Warning The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance.

Share Price:
Up 239.00p
Change Today:
1.40p
Market Cap:
614.04m
Sector:
Household Goods & Home Construction

Housebuilders are too cheap, Jefferies says

By Sean Farrell

Date: Thursday 19 Mar 2020

LONDON (ShareCast) - (Sharecast News) - UK housebuilders are too cheap, Jefferies said as the broker placed 'buy' ratings on almost all sector stocks after big share price falls caused by the coronavirus crisis.
Jefferies' analysts cut their earnings estimates for housebuilders and building products suppliers by an average of 15-25% for the current year. But at valuations not seen since directly after the Brexit vote in 2016 shares prices are too low for a sector expected to achieve a return on capital of 20% or more.

Share prices in the sector had fallen by 50% in the past month as investors were gripped by fear about the effect of the Covid-19 pandemic on housebuilders.

Glynis Johnson and her colleagues at Jefferies said their top picks in the sector are Persimmon, Berkeley, Redrow, Countryside, Forterra and Polypipe. But they recommended investors to buy all companies in the sector apart from McCarthy & Stone, which they left as a 'hold'.

Companies upgraded to 'buy' from 'hold were Barratt Developments, Bellway, Crest Nicholson, Taylor Wimpey, Vistry and Ibstock. Berkeley, Countryside, Persimmon, Redrow, Watkin Jones, Forterra and Polypipe were held as 'buy' recommendations.

"We believe recent share price moves have brought significant opportunity," Johnson wrote. "We have upgraded to buy almost all the stocks under our coverage in the UK housebuilder and building material subsectors."

The analysts cut their price targets by an average of 15%. They said that after recent price falls that suggested an upside of 30-100% to their new price targets.

For building products companies Polypipe's potential upside is limited because its decline has been less severe, the analysts said. Forterra is the top pick with Ibstock upgraded to 'buy'.

"Even after the sharp earnings downgrades, we anticipate the brick industry to continue operating at close to full capacity utilisation and leverage to remain below the target threshold," the Jefferies analysts said.

"We believe the market is severely underestimating the strength of [Forterra and Ibstock's] balance sheets, demand profile and supply discipline, while these stocks are also relatively immune to house price fluctuations."



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CRST Market Data

Currency UK Pounds
Price 239.00p
Change Today 1.40p
52 Week High 519.00p
52 Week Low 164.50p
Volume 469,104
Shares Issued 256.92m
Market Cap 614.04m

Performance Indicators

Compare performance with the sector and the market.

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Income
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Growth
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P/E
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Dividend Yield
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EPS Growth
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Operating Margin
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What The Brokers Say

Strong Buy 5
Buy 0
Neutral 3
Sell 0
Strong Sell 2
Total 10
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

CRST Dividends

  Latest Previous
  Final Interim
Ex-Div n/a 19-Sep-19
Paid n/a 04-Oct-19
Amount 0.000p 11.20p

Trades for 21-Oct-2020

Time Volume / Share Price
16:35 117,408 @ 239.00p
16:29 5 @ 239.20p
16:29 96 @ 239.60p
16:29 521 @ 239.40p
16:29 48 @ 239.20p

CRST Key Personnel

CEO Peter Truscott
COO Tom Nicholson