Sector movers: Sentiment cools towards homebuilders

Homebuilders were under the cosh at the end of the week, dragged lower by a negative reaction to the latest trading statement out of Berkeley Group.

Analysts at Shore Capital and Numis described the company´s IMS as “solid” and “good”, respectively, with the company apparently on track to meet its target for £2bn in pre-tax profits over the next three years alongside a 200p dividend to boot.

Nevertheless, the best may now be past for the group – and more importantly, priced into the stock – in London after having secured good assets in the prime central London market some years ago which will eventually be traded out, one analyst said.

“With the sector looking so fully valued versus its position just a couple of years ago, we should get used to this share price reaction – the easy days for the sector are now well behind it,” said Chris Beauchamp, senior market analyst at IG.

Also weighing on sentiment towards the sector perhaps, real estate investment trust Hansteen Holdings came under pressure in afternoon trading, after it emerged its joint chief executives were planning to sell a combined 1.9% stake in the firm.

Nonetheless, technical analysts at JP Morgan sounded a positive note on the wider European Real Estate sector on Friday, telling clients that while they saw risks in construction/materials, sector positioning was strengthening in Real Estate.

Heading the other way, restaurant and pub operator Mitchells & Butlers was on the up after having its 'buy' rating reiterated by analysts at Deutsche Bank. The report set a price target of 420p on the stock, indicating a potential 55.8% upside from Friday's opening price of 269.5p.

Another pubco, Enterprise Inns, was also rising after a report from Deutsche. The bank reiterated its 'buy' rating on the company, and set a target price of 15.