The response was probably not what the market was expecting as shares in mid-cap housebuilder Redrow plc (LON:RDW) subsided 1.5% after Jefferies upgraded them to ‘buy’.

The 981p price target means the stock (changing hands for 813p) is trading at a 20% discount to what Jefferies considers fair value.

Analysts at the London arm of the American broker did caveat their generally positive research with this line: “The investment case at Redrow is still not without company-specific risks”.

They added: “The group has ridden the storm of the [first-half] results which showed the lower weighting of completions. However, still likely to remain an issue is the c.50% of the Help-to-Buy sales to first-time buyers are given the changes in the scope of the scheme next year.

“Redrow remain confident in the demand profile for its product mix, but this may take until mid-next year to prove.”

Jefferies’ analysts also pointed out there remains a stock overhang as founder Steve Morgan and his charity look to reduce their holdings, which could act as a depressant on Redrow’s share price.

However, the analysts also noted that at 1.4 times net tangible asset value (NTAV), Redrow shares trade at a 14% discount to the sector average valuation. And they pointed out that as the builder has “scope for a bounce in capital returns next year, we believe the growth potential from this proven and well-run company is under-estimated”.