📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Citi ups Bellway shares target, highlights steady performance and growth prospects

EditorEmilio Ghigini
Published 06/10/2024, 09:56 AM
BWY
-

On Monday, Citi updated its stance on Bellway Plc (LON:BWY:LN) shares, a notable UK homebuilder, by raising the price target to GBP31.51 from the previous GBP30.33. The firm continues to endorse a Buy rating for the company's stock.

This adjustment follows Bellway's fiscal year trading update, which indicated a steady performance and the company's ability to meet its projected completions of 7,500 units for the financial year 2024.

The anticipated average selling price (ASP) is now slightly higher at around GBP305,000, influenced by the product mix, compared to the earlier guidance of approximately GBP295,000.

The trading report for the period starting February 1 until June 2 showed promising results, with a private sales rate of 0.62, or 0.61 when excluding bulk sales. This figure surpasses Citi's estimate of 0.59 and suggests a relatively strong demand environment despite challenges in affordability.

Notably, the cancellation rates remained low at 11%. The firm pricing environment has been maintained with selective use of incentives and controlled cost inflation on new tenders.

Bellway's performance is further bolstered by an encouraging outlook for growth from the financial year 2025 onward. The company is optimistic about an improved planning landscape following recent elections. The update also highlighted a targeted reduction in underlying operating margin by at least 600 basis points, aligning with expectations.

Citi's revised price target reflects confidence in Bellway's ability to navigate current market conditions and capitalize on growth opportunities in the coming years. The company's strategic approach to pricing, cost management, and planning for future expansion has been recognized as key factors contributing to its positive outlook.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.