Broker snap: Housebuilders oversold

1st Jul 2009 12:02

The share price revival by housebuilders ran out of steam in June but Merrill Lynch believes many of the big names in the sector are undervalued and trading on a "worst case scenario" basis.The broker has upgraded Taylor Wimpey and Persimmon from "neutral" to "buy" on valuation grounds. Merrill Lynch believes all of the bad news is now priced into the shares of the big two in the housebuilding sector, though it does not expect any significant upturn in trading fortunes for the sector in the near term.The broker also upgrade Bovis Homes from "underperform" to "neutral" and reiterated its "buy" recommendation on Redrow.