Citigroup cuts Taylor Wimpey to 'sell' on valuation but says fundamentals are robust

10th Jun 2015 12:36

Citigroup downgraded Taylor Wimpey to 'sell' from 'neutral' on valuation grounds following a very strong run in the share price, as it raised the target price to 170p from 160p to reflect changes made to its valuation methodology.It noted that the share price is up 39% year-to-date and around 70% over the last 12 months.Still, Citi said fundamentals are robust, with the balance sheet in good shape and the group now almost purely focused on UK housing."It is doing a good job repositioning its strategy to support its capital return programme with a 'soft' cap on volumes and is also building its strategic land bank. It has made very good progress on its medium-term financial targets," said the bank.Citigroup expects the group to report pre-tax profit of £582m in 2015 and grow its net asset value by around 6%.At 12:45, the shares were up 0.4% at 184p.