Taylor Wimpey Share Discussion Threads

[roguetraderuk] 25/5/2022 15:33

Liberum said on Wednesday that Persimmon and MJ Gleeson were its top picks in the housebuilding sector as it noted sharp share price declines in the sector.

The broker said housebuilder shares have fallen around 30% in the year to date and 40% from their pre-pandemic level in February 2020, with the market pricing in a drop in house prices.

"We are convinced the gathering macroeconomic challenges will lead only to softening of the housing market, not collapse," it said, adding that its confidence is based on good affordability, significant savings and a strong labour market.

Liberum said it was cutting its 2023 estimates as it now expects a 1% increase in house prices in 2023, down from a previous forecast of 3% growth. It is around 7% to 8% below consensus, but still sees more than 30% total shareholder return upside in eight of the nine stocks its covers, and more than 50% in three stocks.

It said the market may be forgetting that the sector is extremely well capitalised, with net cash of around 18% of market capitalisation.

"Catalysts for better performance are a peak in inflation or rate expectations, M&A and enhanced shareholder returns," it said.

Persimmon and MJ Gleeson are Liberum’s preferred stocks. It pointed out they are more exposed to markets where prices are less stretched, first-time buyers can work overtime to offset cost pressures and buyers may trade down to their affordable price points.

MJ Gleeson has a unique growth model selling low-cost housing, which is a much-undersupplied market, it said.

"Its unique social purpose, bringing home ownership to low earners, key workers and young people should help sustain a premium valuation. Its own customers can work overtime to offset higher costs and it may win share as some buyers move away from higher priced alternatives."

Liberum said Persimmon is a high-quality business with sector-leading returns and a strong balance sheet. It also has good exposure to northern markets and low-price points, where affordability is best.

Meanwhile, the growth prospects of Vistry’s partnerships business are significantly undervalued, it said.

Liberum has a ‘buy’ rating on Barratt Developments, Bellway, Berkeley, Crest Nicholson, MJ Gleeson, Persimmon, Redrow, Taylor Wimpey, and Vistry.

Liberum is the house broker for MJ Gleeson.

[beckers2008] 25/5/2022 15:19

Jugears,

I'll tell you why.

He's an idiot, lol, just Lol!

[jugears] 25/5/2022 15:17

Never heard of them, why dont you quote firms with some credibility you plonker!

[ghhghh] 25/5/2022 14:27

10 year bond yields give the best indication of future interest rates.

Recession the principle risk and therefore interest rates will stay low. CBs have an impossible job but as long as bond markets remain sanguine (bond markets still believe inflation transitory) CBs will lap up inflation since it devalues their debt!

Low interest rates a major support for the house prices and should help avoid a crash even if/when we dip into recession.

Good update today. Reassuring that TW clearly being careful to avoid the usual cyclical hiccups.

[beckers2008] 25/5/2022 14:12

Sick,

You have no idea about how the markets work.
The currency market is your guide, DYOR you may learn something.
If you had any idea of how the UK housing market works, you would not be stating the words you do.

You are an idiot with Zero credibility, lol, just lol!

[sikhthetech] 25/5/2022 14:11

Watch the supply increase and demand decrease..


sikhthetech20 Feb '22 - 15:26 - 5884 of 5899 Edit
<...>

When the housing market crashes, no HB is immune from the crash. Likewise, listed HBs are not immune from stockmarket falls or movements.

Govn support, provided during pandemic, has ended. Repossessions which were stopped during pandemic are legal again.
Around 30k homeowners in severe mortgage debt.
Inflationary pressure, interest rate rises, NI rises, Council tax rises, energy price rises all impact affordability.

[beckers2008] 25/5/2022 13:26

sT,

You did state that TW, will have 500 more lows which at 0.25 lower each day equals £1.25 and they haven’t had consecutive lows since your statement, do the maths, poor chap, you consistently make mistakes and consistently spout BS.

You are an idiot with Zero Credibility, LOL, JUST LOL!

[sunshine today] 25/5/2022 13:16

Yes I am predicting 6% base rate.

Remember 25 years ago no one on the planet, ever thought, rates would be under zero

[beckers2008] 25/5/2022 13:11

st,

You were projecting 6%!
And TW, having another 500 new lows in their SP!

You have Zero credibility and you are an idiot, lol, just lol!

[sunshine today] 25/5/2022 13:05

That’s no less than 11 ticks up.

Each one adds to the pain and impending gloom

[beckers2008] 25/5/2022 13:01

Jugears,

Yep, getting to 3% will take a while, into 2024.

"The interest Rate in the United Kingdom is expected to be 1.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the United Kingdom Interest Rate is projected to trend around 2.75 percent in 2023 and 3.00 percent in 2024, according to our econometric models"

[25guilderbag] 25/5/2022 12:43

Yes, ECB need to start tightening (early as July?) but it will have consequences, bond markets are jittery already. No idea how it will play out but there's potential for issues (Italy?). Is eurusd going to parity, further rate rises stateside are almost guaranteed. How will ECB and BoE respond? Only the brave or foolish would bet on the interest rate ceiling, so many variables.

[unnavailable] 25/5/2022 12:25

'The people who will suffer most are not mortgage borrowers'.What is a mortgage borrower?. Is it someone who has no debt other than a mortgage and will be unaffected by rising rates along with rising costs?. Mortgage borrowers who are severely overleveraged will definitely be affected. It's weird to imply that it's not all connected. Margin compression, layoffs, unemployed, can't pay mortgage.

[sunshine today] 25/5/2022 11:35

JUGEARS,

That fine, till they can’t hold the line, probably international events.

[jugears] 25/5/2022 11:32

ST Imo getting to 3% is going to take a long time if the BoE sticks to base rate increasing by a quarter of a percent at a time then it gives people more time to adjust, Interest rates need to be at 3% & have done for many years so that it benefits both savers & borrowers, the world is now seeing a different type of inflation & raising interest rates is not going to do anything so why rush to put them up? it wont bring energy & oil prices down & if they don't fall neither will inflation.

[dexdringle] 25/5/2022 10:50

Jug, yes they (interest rates) will rise. But they won't get near the rate of inflation as they did in previous high inflation scenarios.

The world is a different place now. It is a woke, namby pamby, place. Which means decision making is sub optimal and, ironically, it isn't going to end well for the poor.

Last week an MP said that if people needed more money they should work more hours or get a better paid job. Aside from robbing a bank, those are (literally) the only options someone has. She was, in effect, stating the bleeding obvious. But the stick she took was unbelievable !

[sunshine today] 25/5/2022 10:48

“Base Rate won't go above 3%. Simply because the insane levels of National Debt we now have would start to become unaffordable much above that”

/////////////////////////////////////////////////////////////

You have absolutely no idea how the base rate will react when we have a run on the banks.

In essence you KNOW above 3% panic sets in !

[rwlly1] 25/5/2022 10:41

In 1952 average property was £1,801 in todays money £56,000, clearley builders should be able to build and make a profit for a lot less than they are currently doing.
Maybe it will become a political nightmare if something is not done.

[jugears] 25/5/2022 09:57

I think we are currently more likely to see them rise rather than fall, putting interest rates up is going to be a very long term fix for inflation & will take years to have an impact even if it stops consumers buying goods it wont bring the price of those goods down because there will still be demand else where & this wont change until world stock levels for goods & materials improve, you cant expect the world to stop for 3 months & then expect things to carry on as normal & we are very unlikely to see lower oil & gas prices for a good while yet, no amount of interest rises will help that, we are where we are & you just have to curb your life stile to suit.

[dexdringle] 25/5/2022 09:31

Base Rate won't go above 3%. Simply because the insane levels of National Debt we now have would start to become unaffordable much above that.

'Financial Repression' is the order of the day. It suits the government to run significant negative real rates of return. Previously, say in the 70's and 90's, we have seen interest rates at 2% more than inflation. That isn't going to happen.

The people who will suffer most are not mortgage borrowers (who will benefit from Financial Repression as the real value of their debt will be inflated away) but rather those with cash savings the real value of which will be eroded away at a rate never seen before.

House prices may fall - but it won't be by more than 10%. Which is pretty much only the growth from the last 12 to 18 months. Small builders may struggle but the established players will be fine.

[ftir1] 25/5/2022 09:23

I simply can't believe the naivety / ignorance that populates these bb's

The mind boggles.

[jugears] 25/5/2022 09:22

Yes as your chum sickly says the markets look forward not back & dont forget house builders do sell houses in recessions.