Optimistic outlook supports Berkeley Group share price
Despite a rally over the past six weeks, shares in Berkeley Group do not look too richly-valued.
Optimistic outlook supports Berkeley Group share price
Berkeley Group, the housebuilder, reports first half figures this Friday. It expects to achieve a total profit of £1.05 billion before tax in the fiscal years 2024 and 2025. Analysts have projected a split of £540 million for fiscal 2024 and £500 million for 2025.
This guidance suggests a 50/50 profit distribution for the current year, resulting in an estimated pre-tax profit of £270 million in the upcoming interim results. Comparatively, the figure stood at £285 million in the same period last year.
Berkeley has committed to distributing £283 million, equivalent to 266p per share, to shareholders annually until September 2025.
Overall, the alignment of positive company statements with the general improvement in the housing market has contributed to the recent rally in Berkeley's shares. The company's commitment to shareholder cash handouts also serves as an additional incentive for investors.
The recent trading update in October restated the confident outlook for the shares. At 11 times earnings, and with a yield of 2.7%, the shares do not look too expensive, even given the surge in the share price since mid-October.
Analyst ratings for Berkeley Group
Refinitiv data shows a consensus analyst rating of between ‘buy’ and ‘hold’ for Berkeley Group – 2 strong buy, 7 buy, 4 hold and 3 sell - with the median of estimates suggesting a long-term price target of 4,350 pence for the share, nearly ten percent below the current share price as of 4 December 2023.
Technical outlook on the Berkeley Group’s share price
The Berkeley Group share price, which has risen by over 22% year-to-date, is on track for its seventh consecutive week of gains and targets its May-to-December 2021 highs at 4,902p to 4,972p. In this resistance zone the share price may, at least short-term, stall.
Berkeley Group Weekly Candlestick Chart
The steep accelerated uptrend line at 4,659p offers immediate support ahead of the May peak at 4,549p. While the next lower July high at 4,426p doesn’t give way, the strong November-to-December uptrend remains intact.
Berkeley Group Daily Candlestick Chart
From a longer-term perspective the Berkely Group share price has clearly resumed its bull run which began in September 2022 and which has the psychological 5,000p mark in view.
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