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STOCKS NEWS EUROPE-Taylor Wimpey gains on Merrill upgrade

Wed Jul 1, 2009 3:45am EDT

Stocks

   

Shares in UK housebuilder Taylor Wimpey (TW.L) gain 4.9 percent, while peer Persimmon (PSN.L) adds 2.0 percent as Banc of America-Merrill Lynch raises ratings in a sector review.

The broker upgrades both Taylor Wimpey and Persimmon to "buy" from "neutral" on valuation grounds, reflecting its conviction that the firm's share prices are currently already more than discounting a worse-case scenario for land and writedowns.

Merrill Lynch also raises its stance on Bovis Homes (BVS.L) to "neutral" from "underperform" while leaving its net asset value (NAV) calculations and price targets unchanged across the sector.

The broker says it does not believe that trading for the UK housebuilders will improve significantly anytime soon but it feels that from an NAV perspective, there is a very strong case for saying that these stocks as well as Redrow (RDW.L) -- on which it repeats a "buy" rating - have now been oversold.

Bovis shares add 1.2 percent, while Redrow gain 1.5 percent.

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net


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