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On Friday, Citi analyst Ami Galla revised the price target for Taylor Wimpey (LON:TW) Plc (TW/:LN) (OTC: TWODF), a leading UK homebuilding company, to GBP1.50 from the previous target of GBP1.57. Despite the reduction, the firm maintained its Buy rating on the stock.
The adjustment followed Taylor Wimpey’s announcement of its full-year 2024 results, which showed a profit before tax (PBT) of approximately £419 million, aligning with market predictions. The company has experienced a strong start to the spring selling season, with a private sales rate in the first eight weeks up to February 23 showing a 12% increase to 0.75 units without any bulk sales.
Taylor Wimpey reported an incremental improvement in market pricing since the beginning of the year, with current pricing remaining flat year-over-year, compared to a 0.5% discount in the year-end 2024 order book. The total order book stands at 8,021 homes, an 8% increase, or £2.3 billion, up 16%, providing coverage of over 50% for its 2025 volume targets.
The company anticipates low single-digit build cost inflation for 2025 and remains on track to deliver operational performance in line with market expectations. The consensus for operational profit is around £444 million, with UK completions expected to be in the range of 10,400 to 10,800 units, including a mix of approximately 45% from its H125 housing segment. The H125 margin reflects the lower underlying pricing in the year-end order book. Taylor Wimpey’s financial and operational outlook appears to be steady as it progresses towards its goals for 2025.
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