Peel Hunt has reiterated its ‘sell’ recommendation for Taylor Wimpey saying that while Wednesday’s trading statement was broadly in line, the house builder appears more cautious than its peers.
‘While the statement points to improving metrics for H1 the tone of the statement is a little less upbeat than we have seen here earlier in the year and elsewhere in the sector,’ said analyst Robin Hardy.
He said that margins were better than expectations at 11% in the first half. This will likely drive upgrades to full-year margin and profit estimates.
However, the broker says that the macro environment still remains ‘soft’: ‘mortgage approvals [are] still very materially below any kind of norm and while there is apparently stability in pricing it is something of false image with the distortion from London. National house builders including TW do not really benefit from this and we still see a long slow deflation in selling prices.’
‘We are reviewing our target price [currently 27p] for TW as we change our valuation methodology but even a higher target price is unlikely to change our stance and we remain negative.’
Shares were trading 2.62% lower at 47.97p just before midday.