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Housebuilder Redrow “is the most growth-focused UK housebuilder,” Jefferies follows, with “virtually all the available cash is being used to buy land”. So the broker is not at all alarmed by the low dividend (lowest in the sector) announced with the company’s full-year results earlier in the month. If chairman and major shareholder Steve Morgan is happy to wait, it’s probably best for shareholders too. The broker agrees Jefferies upgraded the target price from 546p to 574p and maintained “buy”.
S&P equities has lowered its target price and maintained its “hold” rating for mining company Rio Tinto. The broker adjusted its target price from 2,750p to 2,400p amid “persistently weak commodity prices”. Rio yesterday agreed to sell its 40 per cent stake in the Bengalla coal mine in Australia to New Hope Corp for $606m (£399m), which S&P estimate is a 90 per cent premium on its operating asset value.