Crest Nicholson PLC (LSE:CRST) shares edged up 1.7% to 165.6p on Friday after RBC upgraded the housebuilder to ‘outperform’, saying the business has “all the pieces” to succeed - just not in the right order until now.
The broker’s fresh optimism follows the company’s recent results and a new strategic push from its CEO, which focuses on building mid-premium homes - properties aimed at buyers with a bit more money to spend, rather than entry-level or bulk-sold homes.
RBC reckons this shift could help Crest bounce back from a rough patch that included fire safety costs and reliance on lower-margin institutional deals.
The target now is to deliver a 13% return on capital employed by 2029. If that happens, RBC believes the shares could more than double in value, with the price potentially climbing to 420p over time.
For now, it’s lifted its target from 180p to 230p, citing “risks to the upside” as problems appear to be in the rear-view mirror.