Can Barratt Keep Building On 2019 Rebound?
Spreadex | Feb 04, 2019 10:07
2018 wasn’t a fun time for house builders, and Barratt was no exception. Starting at £6.53, the stock just kept falling, a period of respite over summer meaning little as it closed out the year at £4.61, a smidge above December’s 2 year-plus low.
Since 2019 began, however, it has rather aggressively rallied, lifting back to a current trading price, and near 3 month high, of £5.49.
The firm’s last update came in October, alongside its AGM, and showed that broadly Barratt’s market woes were due to sector-wide fears rather than any specific issues of its own. For the first 15 weeks of its financial year net private reservations per active outlet per average week were at 0.72, down on the previous year’s 0.74, but with a 12.4% rise in total forward sales to £3.15 billion on a 5.1% increase in units to 12,903.
Commenting on Barratt’s performance, CEO David Thomas said that the company had ‘started the new financial year in a strong position, with a good sales rate, healthy forward order book and customer demand supported by an attractive lending environment.’
Investors will be looking for a similarly upbeat tone on Wednesday, especially after a positive rating by Berenberg back in January, as well as a fuller idea of what they can expect for the year as a whole. Any mention of Brexit and its associated anxieties may also be headline fodder, considering reports of stagnating house price growth in the UK.
Barratt Developments PLC (LON:BDEV) has a consensus rating of ‘Buy’ alongside an average target price of £6.58.
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