Deutsche Bank cuts ratings for five U.K. homebuilders, sending shares lower
By Scott Kanowsky
Investing.com -- Shares in several U.K. homebuilding companies fell on Monday after analysts at Deutsche Bank lowered their ratings for these firms.
In a note to clients, the analysts argued that these stocks are no longer "oversold," or neither trading below their true market value nor primed for a pricing rebound. They added that the risks to the British housebuilding sector are now well-balanced. Private volumes are now seen declining in 2023, but pessimism around falling home prices is easing, the analysts said.
As a result, they believe that investors may look to take profits, which would remove some fuel for a future rally in the sector.
Deutsche Bank subsequently slashed its ratings for Barratt Developments PLC (LON: BDEV ), Crest Nicholson Holdings PLC (LON: CRST ), Redrow PLC (LON: RDW ), and Taylor Wimpey PLC (LON: TW ) to hold from buy. Meanwhile, Persimmon PLC (LON: PSN ) was downgraded to sell from hold.
The U.K.'s housing market has faced increasing pressure as elevated mortgage rates cool buyer demand. Recent data also showed that home prices in the country saw their most broad-based fall last month since April 2009.
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