Canaccord stays at hold on Barratt Developments

Barratt Developments delivered a solid trading update, with management expressing confidence with respect both to the recent trading and the outlook, Canaccord Genuity said.

Indeed, analysts Aynsley Lamin and Matthew Walker pointed out how the homebuilder had decided to increase its land approvals for purchase given its positive outlook, with the company's directors continuing to see attractive returns and margins on land investment.

The exceptions were outside of zone 1 and 2 in London, where the group did not see sufficient opportunities that met its hurdle rates for investment.

"Overall a reassuring update with positive comments on the land market, recent trading and medium-term outlook. We think consensus numbers look well supported but are unlikely to change materially," the analysts said.

The group also said it was strongly forward sold.

"We think consensus numbers look well supported but are unlikely to change materially," Lamin and Walker added in a rsearch report sent to clients.

With the shares in the company changing hands on a price-to-net asset value ratio of 1.7, versus 1.95 times for its peers, Canaccord decided to stick with its 'hold' recommendation and share target price of 630p.