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On Friday, Barclays reinstated coverage on Bellway Plc (LON:BWY:LN) stock, a prominent housebuilding company, with an Overweight rating and a price target set at £33.70.
This move follows Bellway's recent decision to withdraw its non-binding all-share offer for Crest Nicholson, which it had proposed earlier on July 3. The company had considered the potential consolidation with Crest Nicholson but decided against a firm offer earlier this week.
Bellway's management believes the company is already well-positioned for growth, given its substantial land bank. As the fiscal year 2024 commences, Bellway has 22% more plots with short-term implementable planning compared to its holdings in 2019. This is in contrast to other large-cap peers in the sector, who have, at most, maintained their land bank levels.
The analyst from Barclays highlighted Bellway's advantageous position, noting that while competitors may gradually improve their land banks due to a more favorable planning environment, Bellway's current standing provides a solid foundation for above-average growth in the near term.
The wider housebuilding sector is also experiencing a positive macroeconomic backdrop, as evidenced by the decrease in mortgage rates by an average of 30 basis points since the beginning of July. This trend is seen as a supportive factor for the sector's growth and could benefit companies like Bellway.
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