After a disastrous 2018, Berkeley Group shares rebounded quite sharply in early 2019, climbing from £34.53 to £40.02 by the start of March, the first time the FTSE 100 housing stock had crossed that key level for the first time in over 8 months.
Since then, however, it has been caught out by the UK’s ongoing, never-ending Brexit uncertainty. News that house price growth was at its lowest level in almost 6 years dragged it away from £40 in late-March, sparking a steady decline that sped up once again during the speculation that eventually led to Theresa May’s resignation. Berkeley Group shares now sit at a current trading price of £35.95.
Back in mid-March, Berkeley said that the trading environment ‘remains consistent with that experienced over the last 2 years’, with that stability allowing the firm to ‘reiterate the updated pre-tax profit guidance’ for this and the next 2 years, which represented ‘an increase of around 8% in the guidance for the current year.’
As for Brexit, the company alluded to the ‘potential for short-term market dislocations’ arising from the ‘current political backdrop’, but stated it was ‘steadfast’ in its belief in the long-term resilience of its markets in London, Birmingham and the South-East.
In terms of its full year results on Wednesday 19th June, analysts are expecting Berkeley to post a near -28% slide in pre-tax profit to £674 million. Word on how the current trading year has started could also come to dictate how investors react, given the UK is still trapped in Brexit limbo.
Berkeley Group shares have a consensus rating of ‘Hold’ alongside an average target price of £37.44.
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