Ferguson PLC (LON:FERG) and Kingspan Group PLC (LON:KGP) were downgraded by JPMorgan Cazenove on Wednesday as it took a fresh look at the building materials sector.

Resilient first-half performances from the sector showed a greater degree of resiliency driven by pricing momentum, energy cost tailwinds as well as the enactment of various fixed cost reduction measures and use of government support.

READ: Ferguson says trading steadily improved since April

This led to meaningful upgrades for full-year forecasts, but “not so much for 2021”. 

Analysts at the investment bank now see an opportunity to take profit on some of the stocks that have particularly rerated and where valuation “looks full”.

Ferguson and Kingspan were both cut to ‘neutral’ from ‘overweight’ with both trading significantly above the long-term average, “although we would look for any weakness to revisit the story for both stocks”.

READ: Kingspan Group expects the economic environment will remain weak

Those more exposed to the UK, Ibstock,PLC (LON:IBST) and Travis Perkins PLC (LON:TPK), did not get anywhere near the same upgrades before and having not enjoyed the same gains.

The analysts today trimmed the share price target for Ibstock to 175p from 190p, and nudged it higher for TPK to 1,050p from 1,040p.