Broker snap: Panmure hikes Berkeley forecasts after first-half beat

7th Dec 2012 09:01

Panmure Gordon has raised its target price for house builder Berkeley Group from 1,390p to 1,650p following a strong set of interim results.The company reported a 40.7% increase in profit before tax (PBT) in the first half to £142.2m, "ahead of what we were looking for at this stage", Panmure said.Meanwhile, Berkeley declared an interim dividend of 15p per share (nil the year before), part of the 434p that is due to be returned to shareholders by September 2015.This "shows the confidence of management to start declaring dividends early. We would expect further payments to follow over the coming months", the broker said.With Berkeley also giving a upbeat outlook on demand, Panmure has lifted its full-year PBT forecast from £224.6m to £240.1m.However, a 'hold' rating on the stock was maintained by Panmure, with the broker saying that the shares look "up with events"."Berkeley Group is a high quality company, we have seen consistent upgrades and its operating markets remain strong but with our target price implying a forward PNAV [price-to-net asset value] of 1.77x it is hard to stretch the valuation much further at present."The shares were up 4.9% at 1,730.92p.BC