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Can Taylor Wimpey shares shrug off their Brexit woes?

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2018 hasn’t been kind to Taylor Wimpey shares. Opening at £2.07, the stock has seriously struggled in the last 10 months, eventually finding itself at a near 2 year nadir of £1.50 by the end of the market-wide October nightmare.

The housebuilder has, admittedly, bounced since then, though at a current trading price of £1.66 Taylor Wimpey shares are still down 20% from where they started the year.

Taylor Wimpey’s last set of results

The firm’s half year results at the end of July were something of a mixed bag. Though the average selling price for its homes was up 1.6% to £257,000, it actually sold fewer homes during the period, with total completions dropping 2.3% to 6497 (excluding joint ventures).

The decline was blamed on the ‘very poor weather’ during the first quarter – the firm highlighted the 5.7% jump in its order book to 9241 homes as a counter – making the full year ‘more second half weighted than normal’.

Taylor Wimpey did seek to reassure investors about the wider housing sector issues, claiming that, ‘despite some wider uncertainty’ and the ‘ongoing Brexit negotiations’, the company had seen ‘no material impact on customers’ ability or desire to purchase a new home’.

It also posted a 47% rise in pre-tax profit to £305 million, though that increase in large part stems from the grounds rent scandal impacting 2017’s figures.

The frustrating thing for Taylor Wimpey is that, at the moment, its stock price seems more tied to the macro-concerns surrounding Brexit, and what that’ll mean for the UK housing sector, rather than the company’s own financial performance.

That means, even if it posts a positive Q3 update on Tuesday – one that’s now even more important given the increased weighting of H2 – investors may not be willing to listen.

Taylor Wimpey shares have a consensus rating of ‘Hold’ alongside an average target price of £2.07.

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This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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