Shares in Countrywide yesterday hit a new low, sinking to 186.90p after analysts at Jefferies International issued a downgrade from ‘buy’ to ‘hold’.
The shares finished the day at 192.6p, falling 4.65% or 9.39p, with analysts suggesting they could yet go 50% lower.
Countrywide hit a 52-week high almost exactly a year ago when the shares reached 476.60p on October 28, 2015.
Jefferies cut its price target for the shares from 300p to 180p.
It also cut its profits forecast by 24% and its estimate for next year by 31%, citing weak housing transaction data from the Land Registry, weak mortgage approval data and stating its view that Countrywide will scale back its expansion while Stamp Duty levels and Brexit uncertainties temper activity in the UK housing market.
According to the Land Registry’s latest data on transactions, for June, house sales were down 32.2% year-on-year in England to 57,637.
Jefferies also said that the last two Stamp Duty changes have disrupted the UK housing market, slowing the upper end while causing unusual behaviour in the buy-to-let sector.
The firm said: “What should have been a period of short-term pain, while price expectations adjust, is still slowly playing out.
“We also believe that the creation of a two-tier Stamp Duty market acts as a brake on transaction levels. When we add ‘Brexit uncertainty’ into the mix, potential home buyers have more reason to play a waiting game with respect to house purchases, and falling transaction levels are a key driver of our estimate cuts today.
“While the group has a deliberate and broad diversification of business units, it is exposed in many forms to the underlying UK housing market; weakness/strength in house prices, transactions or the private rented sector may lead to changes in our estimates.”
Jefferies also downgraded LSL, parent company of Your Move, Reeds Rains and Marsh & Parsons, to ‘hold’.
However, LSL’s shares were unaffected, finishing the day at 194.50p, just 0.25p down.
Nevertheless, LSL’s shares have taken a hammering over the last 12 months. The 52-week high for LSL is 339.75p on November 2 last year, with a low of 180p last week.
Meanwhile, Foxtons also had a miserable day on the stock market, finishing at 103.66p, down 3.8% or 4.09p.
Financial website Motley Fool yesterday forecast further falls in Foxtons’ share price, and said that this year is shaping up to be one that shareholders of Countrywide and Foxtons will want to forget.
Countrywide shares are currently 52% down so far this year, and Foxtons down by 44%. Motley Fool said the share prices in both firms could drop another 50%.
Below, the chart tells how Countrywide’s shares have fallen since May last year
Comments (12)
There are a lot of people with their knives out and undoubtedly Countrywide have many enemies. Countrywide are still the largest player in the market and therefore are where the media will first feed, Ironically the rest of us should be grateful to Countrywide for taking the heat ………………… its those 10000 poor soles I feel sorry for.
You are worried about their shoes? 😉
The Americans have their soul singers and we have ours !
There’s a joke in there somewhere
Are they in Dover?
nope they’re our (s)
innit !!
Enemies? Disaffected former employees or competitors? May be; may be not. Unfortunately for the staff and shareholders, ‘players’ appears to be the appropriate adjective. Misunderstanding, underestimation of the responsibility and task is becoming increasingly apparent.
I worked as a Senior Branch Manager at Countrywide for 6 months last year at a time when the “let’s do retail” philosophy was being rolled out. At the sharp end, throughout the company it was regarded as a joke. The constant stream of emails, announcements, messages and ideas that came out of head office showed a stunning lack of understanding of the industry. Countrywide has absolutely no idea what it wants to be or where it’s going.. It’s a multi-brand, directionless mess. I’m watching with fascination for the next installment.
Ms Platt really cannot have long left ……..
And PB shares still trading 95p to high (in my opinion)
Is CW going to be the BHS of the property world one wonders.
No, BHS was loved by the public!
Anyone familiar with what is happening inside Countrywide will know only too well, market conditions are what they are and not the real problem. Q3 figures due to be made public will show that the real issues lie with the direction the organisation is being forced down and the ongoing ‘it’s retail’ misunderstanding of an industry adopted by the leadership in place presently. This is looking like a disaster. In excess of 10,000 people are employed in this organisation. At what point does it become beyond doubt that this ‘supertanker is hitting the rocks’? This experiment is failing! Is it just me that reads the comments of ‘Jeffries’ as a a way of diverting responsibility away from the management and focusing on market conditions, sdlt etc????? Looks and feels to me like the shares will be soon less than £1 a share and by the end of the year with Q4 results public, less than half of that.