​​​Berkeley Group earnings outlook ahead of first-half results​​​

Anticipating Berkeley Group's upcoming financial results

Investors and traders will be closely watching Berkeley Group on Friday as the premium housebuilder releases its first-half results against a backdrop of its share price having declined by 15% year-to-date, significantly underperforming the FTSE 100.

Berkeley Group versus FTSE 100 comparison chart

Key metrics to watch

Berkeley's September trading update projected full-year pre-tax profit of £525 million, representing a slight decline from the fiscal year (FY) 2024.

First-half comparisons from last year show pre-tax profit of £298 million and an operating margin of 19.5%.

Net asset value (NAV) per share, which stood at £33.63 at the end of the FY 2023, will be another crucial metric under scrutiny.

These figures come amid broader sector pressures around interest rates and regulatory costs.

Sector valuation context

Price-to-NAV multiples across the housebuilding sector have contracted sharply in recent months. Government deregulation initiatives and housing targets have failed to boost sentiment.

Berkeley commands the sector's highest price-to-book ratio, reflecting its premium positioning. This premium valuation persists despite broader market concerns about interest rates and potential remediation costs.

Analyst ratings of Berkeley Group

TipRanks gives Berkeley a Smart Score of 2, underperform, with 1 ‘buy’, 5 ‘hold’ and 2 ‘sell’ analyst recommendations.

TipRanks Smart Score

According to London Stock Exchange Group (LSEG) Data & Analytics, 4 analysts rate Berkeley Group as a ‘buy’, 9 as a ‘hold’ and 3 as a ‘sell’ with a mean price target at 5130 pence (p), 25% above current levels (as of 4 December 2024).

Berkeley Group analyst ratings

Technical analysis of Berkeley's share price

The Berkeley share price has been capped by its 200-week simple moving average (SMA) over the past three weeks before dropping to a 13-month low at 4088p, a level last traded in October 2023.

A potential downside target zone is made up of the March and October 2023 lows at 3916p to 3904p, which together with the psychological 4000 region may offer support.

Berkeley share price weekly candlestick chart

For the bulls to regain control, a rise and weekly chart close above the late November peak at 4380p needs to be seen.

Even if such a bullish reversal were to unfold, the July and October lows at 4574 - 4582 would most likely act as resistance and may take some convincing to be forced through.

Berkeley share price daily candlestick chart

Steps for trading in Berkeley shares

1. Research the United Kingdom (UK) housing market and Berkeley's positioning
2. Open a CFD account with us
3. Monitor Berkeley's share price movements
4. Implement appropriate risk management strategies

The upcoming results will provide crucial insight into whether Berkeley can maintain its premium valuation amid challenging market conditions.