Broker snap: Bovis and Bellway offer best value

6th Jul 2009 13:09

RBS has taken a look at the UK housebuilding sector and reckons Bellway and Bovis Homes offer the best value in the sector after both stocks went into a slump post-April.Royal Bank of Scotland (RBS) has upgraded both stocks to "buy", with Bellway upgraded from "hold" and Bovis from "sell".Ahead of a trading update tomorrow Persimmon is upgraded from "sell" to "hold" but Redrow is downgraded to "sell" from "hold".RBS still foresees UK house prices trending lower, but feels that the risk of a significant overcorrection is much reduced."There have been modest positive surprises in the trading picture for the UK housebuilders in 2009, thanks to record low interest rates, unprecedented central bank/government stimulus programmes and ongoing supply restrictions," RBS said, adding that there have been signs of improved sales trends and pricing stability in the market.Panmure Gordon is also a fan of Persimmon and rates the shares a "buy" with a price target of 428p. "Although we expect UK housing market conditions to weaken once again in the coming months, we believe the Persimmon share price now fully factors in this difficult trading environment and further asset write-downs, and there is attractive upside to the shares," the broker said.