Housebuilder shares under pressure
Published: 01 February, 2011
LONDON: Shares in housebuilders have come under pressure following a negative note from Liberum Capital, and worries about the UK economy's future performance.
This week's UK GDP figures showed a shock fall in the final quarter, and a key confidence survey on Friday showed a sharp drop.
Broker, Liberum has cut its recommendation on Persimmon from hold to sell. "We think that Persimmon's shares are most likely to underperform from here as their valuation is already comparatively high, and as we believe that the company is the most exposed to areas of high public sector employment," it said.
"Its good balance sheet should be viewed positively but it has been much more reticent in buying land than anybody else, and it may still issue equity if it decided to embark on another round of consolidation."
Liberum has also trimmed its price targets on all the other house builders apart from Bovis Homes.