Bellway shares 'up with events', says Deutsche Bank

The bank said Bellway elicits numerous adjectives and 'pragmatic, sensible and cautious' can quickly morph into 'tepid, dreary and negative', depending on the zeitgeist.

"Its recent update evoked a negative reaction, reflecting concerns over productivity levels (so subjective in reality it is hard to make useful comparisons with peers) and a slew of additional costs," it said.

Deutsche reduced its 2020-22 pre-tax profit forecasts by 36-47% to reflect the impact of Covid-19.

"The shares now trade marginally below 2021E book value (circa 0.9x), despite a respectable return on average capital employed of 12.3% (likely above the cost of capital).

"However, to reflect significant reductions to our estimates, we lower our target price from 3,093p to 2,422p."