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BUZZ-UK big housebuilders: Liberium raises margin concerns
November 3, 2015 / 9:38 AM / 2 years ago

BUZZ-UK big housebuilders: Liberium raises margin concerns

** Shares of UK’s biggest housebuilders spend a day in red after Liberum analyst says valuations are too optimistic to weather gross margin pressure expected in coming years

** Liberum moves Barratt Development, Taylor Wimpey & Persimmon to “sell” from “hold” & says the return of building cost inflation & a more vigilant house market regulator will suppress gains due to house price inflation

** The three biggies the top losers on the Stoxx 600 Personal & Household Goods index, lead by Barratt Development, down c.3 pct and on track for sharpest loss since mid-October

** Cut comes day after JPMorgan’s downgrade on Barratt & Persimmon

** Liberum keeps Berkeley at hold citing slowing London growth & Bovis too citing full valuation

** Builders have shown a year of sharp growth as an acute demand-supply imbalance in the UK housing market has helped them fetch higher values, especially in red-hot UK while dividend payouts have drawn in equity investors searching for yield

** Barratt, Taylor Wimpey & Persimmon also 2nd to 4th top losers on the bluechip FTSE-100 index

** Taylor has seen the sharpest gain YTD with a nearly 50 pct rise & is also trading at sharpest forward P/E valuation among the builders (RM: esha.vaish.thomsonreuters.com@reuters.net)

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