That’s the advice of City broker Deutsche Bank, which upgraded the stock from 'hold' to 'buy' as it sees the blue sky getting brighter.
A number of City analysts have highlighted the positive impact the government’s new Help to Buy scheme could have on the ailing market, which has been in the doldrums since the credit crunch in 2008.
A report last week suggested the George Osborne’s mortgage scheme is so far having the desired effect. In just two months, 4,000 people have reserved a new home under Help to Buy.
“For those with confidence in a recovery in new-build volumes then the company’s growth ambitions we believe offer further leverage, driving some of the most significant earnings upside and ROCE [return on capital employed] relative to peers,” said analyst Glynis Johnson.
“Our Blue Sky analysis on volumes upside suggests 40% upside in completions, driving 60% upside in PBT [profit before tax] and 45% upside in valuation without including any potential benefit from house price inflation.
“While we are yet to increase our forecasts to this level, we see Bovis as the mid-cap housebuilder to own for those who believe in a new-build market recovery,” concluded Johnson, who raised her target price by 9p to 878p.