Homebuilder Cairn Homes and Glenveagh Properties shares fall as broker cuts targets

Shares in housebuilders Cairn Homes and Glenveagh Properties fell as Davy cut its price targets for the firms, citing a “significant” slowdown in asking prices outside of Dublin.

Cairn shares fell 1.5% to €1.12, to bring its losses in the past year to almost 22%, while Glenveagh shed 3.3% to 73c, to bring its losses to 25% over the same period.

The share prices of the two stockmarket-listed builders have been under pressure for some time as investors turn cool on Irish property firms and banks ahead of Brexit.

Davy cut its forecast for home price inflation to 1% from 3% by the end of 2019. On Cairn, it cut its outlook for revenues and operating profit and moved its price target to €1.50.

The broker said Cairn was “well on course to hit our forecast for at least 35c per share in shareholder returns in the three-year period FY 2019-2021”. It stuck to its out-perform rating for the shares.

On Glenveagh, it pared its revenue outlook and operating profit and cut its price target to €1.40. “The substantial upside to intrinsic value further demonstrates to us that the market is continuing to price in a material fall in house prices in Ireland in the short term, something we see as unlikely outside a hard Brexit scenario. We reiterate our outperform rating,” it said.