On Monday, RBC Capital maintained a positive outlook on Bellway Plc. (LON:BWY:LN), reiterating its Outperform rating and a price target of GBP37.50. The firm's analyst highlighted a significant year for the company, marked by strategic decisions that deviated from its traditional operating model. Notably, Bellway's interaction with Crest Nicholson (LON:CRST) did not lead to a merger, a move considered favorable for both companies by the analyst.
Bellway's approach this year included an unusual step of providing two years' guidance at its full-year results announcement in October. The company forecasted over 20% cumulative volume growth organically over the following two years. CEO Jason Honeyman expressed confidence in the company's resources, including land, planning, outlets, divisional capacity, and work in progress (WIP) platform, to achieve this growth.
The CEO's stance on the future indicates a focus on execution and delivery for fiscal years 2025 and 2026, rather than an emphasis on new outlets or securing additional planning permissions. RBC Capital's interpretation of Bellway's guidance suggests that the company is quite certain of its ability to meet its targets, as it typically takes a conservative view of its prospects.
The analyst's comments reflect a belief that Bellway's self-assessment is more reserved, and therefore, the provision of such positive guidance indicates a strong conviction in its growth trajectory.
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