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Investing.com - RBC Capital has downgraded Barratt Redrow PLC (LON:BTRW) (OTC:BTDPY) from Outperform to Sector Perform while reducing its price target to GBP4.50 from GBP5.75. The stock is currently trading at $10.35, down from its 52-week high of $13.18, with a year-to-date decline of 5.39%.
The downgrade comes as the UK homebuilder faces challenges with its Redrow integration process, which according to RBC Capital "has not been as smooth as Barratt would have liked." These integration difficulties have contributed to a significant 13.87% price decline over the past six months, according to InvestingPro data.
RBC Capital noted that "with hindsight the due diligence could have been more diligent" regarding the merger between the two British homebuilders.
The investment bank also highlighted timing concerns, stating that being without a Chief Financial Officer "midway through an integration process and cost synergy programme is probably not" ideal.
While RBC Capital maintained that "the model isn’t broken," it expects Barratt Redrow to focus on "internal issues ahead of external ones" and believes the company "will be outperformed by some of its peers" in the near term.
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