Peel Hunt has taken the red pencil to the UK building materials and merchanting sector, leading the City broker to reduce a number of target prices and make six recommendation changes, but not all downwards.
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In a note to clients, Peel Hunt’s analysts said: “We are lowering forecasts by 5-8% across the sector to reflect a slower economic outlook, in part Brexit related and in part global growth related.”
They added: “While our aggregated sector profits are still forecast to grow by 8% in CY19, the majority of this growth is coming from recent acquisitions. We expect organic growth to be modest in both 2019 and 2020.”
The group said it reduced a number of target prices, having noted that most sector share prices have bounced sharply in the last month or so on hopes of a softer Brexit, but not all of them leading to its rating upgrades.