Broker views: Housebuilding, media and copper

29th September 2017, 11:12

JP Morgan Cazenove downgraded its investment rating on housebuilder Countryside Properties [LON:CSP] to 'neutral' from 'overweight', whitch it said was following the recent strong share price performance.

The shares are up 42 per cent in the past six months and by 37 per cent since the beginning of the year.

Analysts have left their target unchanged at 335 pence per share.

Commenting on the wider UK housebuilding sector, the City heavyweight commented: "While we can easily argue the sector is cheap across the board, the strongest performers year-to-date have been those companies delivering upgrades.

"On that basis, we feel most comfortable in the small caps, particularly Bellway and Redrow, where we continue to view guidance as conservative relative to recent growth levels."

Elsewhere, Shore Capital upgraded its recommendation on media group WPP [LON:WPP] to 'buy', highlighting that the share price has declined 16 per cent since downgrading the stock to 'hold' back in June on concerns over short-term pricing pressures.

While remaining cognisant of the ongoing headwinds faced by the group, the broker reckons these are now priced in and the current valuation is undemanding considering WPP's EPS and DPS growth potential.

Meanwhile, Investec upped its rating on "pure" copper play Antofagasta [LON:ANTO] to 'buy' from 'hold' as the price of the metal is now back to levels last seen in 2014 and given the extent to which the investment outlook is aligned with the copper price.

The broker said: "All of the major diversified miners have identified copper as a vital commodity within their portfolios, with BHP Billiton recently (26th September) stating that 2017 will be the year of the electric vehicle revolution, with copper the metal of the future.

"Antofagasta's scale and growth potential leaves it well placed to benefit."

Investec lifted its target to 1,047 pence a share (from 957 pence), implying a forecast total return of 15.4 per cent.

At 11:12am:

[LON:ANTO] Antofagasta PLC share price was +13.75p at 942.25p

[LON:CSP] Countryside Properties PLC share price was +1.15p at 342.65p

[LON:WPP] WPP Group PLC share price was -0.5p at 1367.5p