Panmure sees scope for earnings upgrades at Countrywide

6th May 2014 11:00

Countrywide's shares look attractive at current levels following the estate agent chain's strong first-quarter results, according to Panmure Gordon, which maintained a 'buy' rating and 700p target price on the stock."First-quarter revenues grew 35% year-on-year in what is usually a seasonally quiet quarter, but this year the market was off to a flying start," the broker said on Tuesday.Countrywide said that full-year results for 2014 are now likely to be at the top end of expectations, which Panmure said is in the range of £116-126m for operating profits."If the first-quarter momentum is sustained or accelerated there is scope for earnings upgrades. The economy is getting stronger and real wages are picking up which is very supportive," the broker said."Potential negatives are possible interest rate hikes and any drag from regulation (the Mortgage Market Review) but we are not expecting either to seriously impact the national housing recovery apart from some short-term disruption."Panmure said that the shares have underperformed the market recently by 12%; they now trade on 13 times 2014 estimated earnings and just 10 times 2015 earnings."Given the strong growth in prospect that looks attractive."The stock was 1.5% higher at 599p by 11:03.BC