Berkeley Group earnings outlook ahead of first-half results
Berkeley Group's first-half results are due on 6 December, with markets focusing on profit margins and net asset value amid sector headwinds.
Anticipating Berkeley Group's upcoming financial results
Share dealing investors 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 investing in Berkeley shares
- Research the United Kingdom (UK) housing market and Berkeley's positioning
- Consider whether to buy shares or trade derivatives
- Open an account with us
- Monitor Berkeley's share price movements
- Implement appropriate risk management strategies
The upcoming results will provide crucial insight into whether Berkeley can maintain its premium valuation amid challenging market conditions.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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