This report is an updated version of the report published on 24 April 2024 at 07:57 AM GMT +1.

Section 1.0. UK Housebuilding Sector Landscape, Trends & SWOT Analysis

Section 1.1. UK Housebuilding Sector Landscape

The Real Estate market in the UK encapsulates list of companies focused on buying and selling of own real estate, renting, and operating own or leased real estate and fee-based real estate services on a contract basis. Moreover, the overall industry can be bifurcated into two broader sub-sectors such as residential real estate and commercial real estate. Residential Real Estate encapsulates activities such as selling, renting, and buying diverse categories of residential properties. Furthermore, the Commercial real estate process is considered one of the vital indicators to track the performance of the economy. Kalkine’s Sector Report covers the Investment Summary, Sector Landscape, Trends & SWOT Analysis, Risks, Recent Business Updates along with the Valuation, Target Price, and Recommendation on the stock.

Section 1.2. Trends in the Housebuilding Sector

Section 1.3. SWOT Analysis

Section 2.0. UK Housebuilding Sector Outlook

According to the estimates by Office for National Statistics (ONS), UK house prices dropped averagely by 0.2% in year to February 2024. However, the property value increased by 0.4% in 1-month from January to February 2024. Moreover, the property market has gained momentum boosted by improved consumer sentiment and the availability of competitive mortgage offers. According to the latest house price data from Halifax, Average property prices dropped around 1% in March 2024. Furthermore, the drop in house prices comes after five consecutive months of modest rises. Overall, the UK house prices are expected to recover boosted by improved consumer confidence and the slowdown witnessed in UK inflation.

After gaining insights into the Housebuilding sector, we should look at the business model of two relevant players listed on the London Stock Exchange.

Section 3.0. Taylor Wimpey PLC (LSE: TW.) (‘Buy’ at GBX 133.85, closing price as of 23 April 2024)

3.1 Company Details

3.2. Key Metrics in Pictures

3.3 Valuation and Technical Guidance

Section 4.0: Stelrad Group PLC (LSE: SRAD) (‘Speculative Buy’ at GBX 130.50, closing price as on 23 April 2024)

4.1 Company Details

4.2. Key Metrics in Pictures

4.3 Valuation and Technical Guidance

Please note markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 23 April 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/ or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.