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On Monday, RBC Capital Markets adjusted its outlook on shares of Crest Nicholson (CRST:LN), a prominent UK homebuilder, by reducing the price target to GBP2.00 from the previous GBP2.50. The firm maintained its Underperform rating on the stock. The alteration came in the wake of Bellway (LON:BWY)'s decision not to pursue a bid for Crest Nicholson, leaving the company without any current takeover offers.
The RBC analyst highlighted the significant challenges ahead for Crest Nicholson, particularly in the context of operational issues that are not affecting other companies in the sector. These challenges are expected to impact the company's performance relative to its peers. The analyst's remarks underscore the importance of the task at hand for the new CEO, Martyn Clarke, who recently took the helm at Crest Nicholson.
Clarke, with a commendable track record from his time as Chief Commercial Officer at Persimmon (LON:PSN), is now faced with the responsibility of steering Crest Nicholson back on course. The firm noted that the management team's focus should now shift from entertaining potential bids to addressing the company's internal challenges.
The analyst expressed caution regarding the immediate future of Crest Nicholson, suggesting there are no quick solutions to its current issues. With Clarke yet to provide his assessment of the company's situation, RBC Capital Markets is awaiting his insights on whether the necessary provisions have been made. These include considerations of market expectations for Crest Nicholson's sales volumes, selling prices, and profitability.
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