Crest Nicholson PLC (LSE:CRST) slipped on Monday after Stifel downgraded the shares from 'buy' to 'hold', citing a lack of sales momentum, rising legacy costs and disappointing progress on margins.
The broker said these headwinds were most apparent in the south of England and "key characteristics for Crest Nicholson".
The downgrade came alongside a wider note on the European housebuilding sector, in which Stifel cut its financial year 2026 forecasts across the board by 3% to 5%. Forecasts for 2025 were left largely unchanged.
Waiting on Westminster
The sector continues to trade below long-run averages. Stifel puts the average valuation at 0.85 times book value, a level usually only seen when house prices are falling.
That is not currently the case, but the broker acknowledged that the catalyst for a re-rating may still be some way off.
“We concede that the sector may only outperform after the UK Budget is published,” the analysts said. They expect progress to depend on “momentum building in outlet openings, as planning changes deliver, and selling prices”.
Persimmon remains preferred pick
Despite the gloomier tone, Stifel still sees pockets of value and reiterated Persimmon as its top pick. The broker has a Buy rating on the shares, which have held up better than most of their peers in 2025.
Other stocks in the note were not subject to rating changes, but the tone suggests a cautious stance until firmer signs of recovery emerge.
Persimmon shares were up 1%, while Crest Nicholson's were flat.