Analysts at stockbroker Davy believe that house builder Cairn Homes will make less profit than previously predicted as result of some extra costs.
Colin Sheridan and Michael Mitchell of the broker's research staff rank Cairn as "outperform", the equivalent of a buy.
The pair believe that the company will make a total net profit of €230.4 million over the four years 2017 to 2020, around 3 per cent down on a previous forecast of €237.6 million.
Mr Sheridan and Mr Mitchell point out in a note published on Monday that Cairn has indicated that its operating costs will be about €2.5 million higher than originally predicted.
They also factored in that the average selling price of the apartments that Cairn is building on a site in Donnybrook, Dublin is likely to be €426,000 over an originally forecast €400,000.
Mr Sheridan and Mr Mitchell have also included the extra finance charge from the €50 million debt secured on the site at Montrose in Dublin that Cairn bought from State broadcaster RTÉ in June.
The analysts acknowledge that Cairn’s current share price – about €1.85 on Monday – factors in its positive medium-term prospects, but point out that it has scope to boost volume growth past 2020.
“Combining this with a very positive housing market currently we reiterate our ’outperform’ rating,” they said.
Cairn beat analysts’ forecasts in September when it reported that profits for the first six months of 2017 grew more than €5 million to €7.7 million.
