Cairn shares slip despite broker backing

Shares in builder Cairn Homes fell yesterday despite a buy recommendation from Cantor Fitzgerald Ireland analyst Darren McKinley, who set a 12-month target of €1.60 for the stock.

A meeting with Cairn chief executive, Michael Stanley and investor relations head, Declan Murray, left Cantor analysts confident that a fall in the builder's share price presented an opportunity to cash in on an undersupplied housing market.

“Our 12-month fair value is €1.60 which would imply 23 per cent upside,” said Mr McKinley in a note recommending Cairn as a “buy”.

However, the stock was down 1.53 per cent at €1.286 yesterday afternoon, having fallen as much as 2 per cent earlier.

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Cantor noted that Cairn could build homes worth €325,000 to €350,000 while earning a cash margin of 40 per cent because it had bought land cheaply. The company has sites capable of holding 14,000 dwellings in some of the “best locations in the greater Dublin area”, it added.