Canaccord reiterates 'buy' rating for Bovis Homes

Canaccord Genuity reiterated a ‘buy’ rating and target price of 1,150p for Bovis Homes on Tuesday after the company released a “reassuring” trading update.

Bovis said it had experienced "no discernible impact" of Brexit worries hitting housing demand and that after an initial slowdown its sales rate has picked back up to where it was a year ago.

The sales rate for the year to date has reached 0.65 reservations per site per week, having been down at 0.6 earlier in the year.

The FTSE 250 company said market conditions remain positive with strong demand from home buyers who are benefitting from good access to mortgage finance.

“We think consensus forecasts are unlikely to change on the back of this update but the market should be reassured on two accounts: the improving sales rate and some early, tentatively positive comments for the longer-term outlook for margins,” said Canaccord analysts Aynsley Lammin and Matthew Walker.

“Shares reside on a 2016 premium to net asset value (P/NAV) multiple of around 1.1 times, making it the lowest rated stock in the sector with the sector average P/NAV multiple at 1.95 times. Shares offer a dividend yield of around 5%.”

Shares rose 2.81% to 908.30p at 1010 BST.