Broker tips: MJ Gleeson, Vistry, Taylor Wimpey, Whitbread, IHG

Analysts at Berenberg raised their target price on construction outfit MJ Gleeson from 720.0p to 842.0p on Tuesday following the last week's positive trading update from the group.

Berenberg said MJ Gleeson's shares "reacted well" to the trading statement, reversing most of their underperformance relative to the sector over the past several months.

The German bank highlighted that MJ Gleeson was opening new sites "more quickly" than it expected and added that price increases looked to have been implemented without any impact on demand.

"Combined, this puts the group in [a] very strong position to attain (and perhaps exceed) 2,000 completions in FY 2022," said the analysts.

However, Berenberg set its forecast at 1,700 to give "some margin for error", but thinks there is scope for this to be revised upwards if market and macroeconomic conditions "remain favourable".

Deutsche Bank said on Tuesday that it remains "constructive" towards the UK housebuilding sector as it changed its ratings on three London-listed names.

The bank downgraded Vistry to 'sell' from 'hold' following the "parabolic" rally in the shares, which are up 70% since early November.

"We continue to believe that relatively high gearing (we expect this to be just under 40%, including land creditors, at the end of this year) raises risks," it said. "Our rating change comes despite a significant increase in our target price from 610.0p to 807.0p."

The bank also bumped up Taylor Wimpey to 'buy' from 'hold' and boosted its price target on the stock to 179.0p from 147.0p.

"This follows a much-improved trading update, where current and next year guidance was raised significantly," it said, adding that early 2021 was strongly underpinned by forward order books, but cautioned that risks remain on the horizon.

Jefferies has upgraded Whitbread but downgraded InterContinental Hotels Group following the latest Covid-19 vaccine developments.

The bank said that the successful roll-out of a vaccine programme would "transform" the leisure sector's prospects.

"Vaccines offer investors the prospect that a new normality can resume, at some point. We look beyond short-term restrictions and assume that UK restrictions will lift by the third quarter of 2021," said Jefferies.

Jefferies added that recovery would vary by sub-sector but chose to upgrade Whitbread to 'buy' and downgrade InterContinental Hotels to 'underperform'.