TWODF - Taylor Wimpey: Positive Progression Wholly Priced In After Impressive Share Price Run
2024-02-15 08:00:00 ET
Summary
- TW is progressing well given the wider macroeconomic environment, with average sales price up and land broadly flat.
- We believe its recent share price run is a reflection more so of economic conditions, which appear to be moving favorably.
- Rates appear to have peaked while inflation is declining, positioning an end to this current cycle and a return to expansionary policy.
- An improvement in volume is yet to be seen, however. Further, the industry is facing issues with planning approval delays, threatening near-term inventory levels.
- We believe the acquisition of Redrow by Barratt represents a solid comp from which to value TW. This implies the company is slightly undervalued, although not sufficiently so given the risks.
Investment thesis
Our current investment thesis is:...
Taylor Wimpey: Positive Progression Wholly Priced In After Impressive Share Price Run