JPMorgan downgrades Taylor Wimpey, Redrow

"While it is tempting to turn optimistic on the UK Housebuilding sector following the recent moderation in interest rate expectations, we remain cautious with activity levels going through a seasonal lull over the next few months and relatively elevated valuations in the mid-cap space," JPM said.

"We revise our estimates, which now stand 7% below consensus for 2023-25."

JPM downgraded Redrow to ‘underweight’ from ‘neutral’ and cut the price target to 390p from 550p as it sees the stock’s valuation being vulnerable as soon as the buyback program completes.

Meanwhile, Taylor Wimpey was cut to ‘neutral’ from ‘overweight’ and the price target reduced to 110p from 170p.

JPM maintained its ‘underweight’ ratings on Crest Nicholson and Vistry Group, and said Berkeley Group and Persimmon remain its preferred stocks. It also placed Crest Nicholson and Taylor Wimpey on "negative catalyst watch" into their results.

JPM cut its price target on Crest Nicholson to 170p from 240p and on Vistry to 560p from 800p. It chopped its Persimmon price target to 1,700p from 2,150p.

At 0930 GMT, Redrow shares were down 2.4% at 461p, while Taylor Wimpey was 1.8% lower at 102.38p.