LONDON (ShareCast) - (Sharecast News) - JP Morgan upgraded Barratt Developments to 'overweight' after the housebuilder's "solid" annual results and switched its recommendation on Vistry to 'neutral'.
The bank's analyst Rajesh Patki changed his rating on Barratt shares from 'neutral' while keeping Persimmon as his top pick in the sector.

UK housebuilders have underperformed the wider market by 34% in 2020 and it has paid to stick with "quality" companies such as Persimmon and Berkeley, Patki said. Though there is still plenty of uncertainty over unemployment and Brexit, Patki said the risk-reward trade-off for Barratt had become more appealing with 26% upside on a price target of 590p.

"We upgrade Barratt ... on the back of solid results and better than expected margin outlook," Patki wrote in a note to clients. "New pecking order reflects execution and valuation."

Patki upgraded Vistry from 'underweight' to "take profit" after significant underperformance so far in 2020. He said the shares had 11% upside on a price target of 670p.

Barratt shares rose 0.1% to 512.60p at 11:38 BST and Vistry's shares were down 1.8% to 594p.

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