Berenberg lowers target price on Barratt Redrow
Analysts at Berenberg lowered their target price on housebuilder Barratt Developments Plc Redrow from 540.0p to 485.0p on Wednesday following the group's FY25 trading update a day earlier.
Berenberg said FY25 has proven to be "a more challenging than expected year" for Barratt Redrow, with housing market headwinds persisting and, although it delivered an FY25 result in line with expectations, the impact was felt on reduced expectations for FY26.
The German bank pointed out that Barratt Redrow said it had seen "some improvement" in the mortgage market, but acknowledged that underlying private sales activity "has remained sensitive to consumer caution". On its conference call, Barratt Redrow said price growth was below 1%, while build-cost inflation was flat in FY25 and was expected to rise to 1-2% in FY26.
However, with "a robust balance sheet" and further synergies to be garnered from the Redrow integration, Berenberg thinks that the group remains well-positioned for when "a more favourable market environment" emerges.
Berenberg, which reiterated its 'hold' rating on the stock, also noted that Barratt Redrow trades on 12x earnings per share and 0.8x tangible net asset values.
Reporting by Iain Gilbert at Sharecast.com
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.
