Vistry Group PLC (LSE:VTY) latest update pointed to issues other than just cost overruns in its southern division, notes Deutsche Bank.
In addition, Vistry stated trading in the partner market has been slower than expected and cost inflation is starting to emerge.
As a result, Deutsche Bank has trimmed its profit estimates for the next three years by 14/26/24% respectively and cut its cash forecast.
There is some comfort from the full extent of a review into the issues, which the broker sees as not widespread, although the reduction in estimates is material and the time frame to the medium-term targets is being pushed out.
Deutsche Bank’s share target drops to 1,100p from 1,180p but he rating remains at ‘buy’ given the longer-term potential of the partnerships model.
Shares today were up 1.7% at 751p.