Taylor Wimpey PLC (LSE: TW.)

Taylor Wimpey PLC (LSE: TW.) is an FTSE 100 index listed residential property developer that offers properties in different price ranges. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Investment Rationale – Sell at GBX 119.35

• Higher Cash Cycle Days: The Company’s cash cycle of 765.6 days during H1 FY23 remained more than its industry median of 343.80 days, implying that TW. is taking longer time to generate cash when compared with the industry.
• Financial Decline: During H1 FY23, revenue, operating profit, and basic earnings per share declined 21.2%, 44.5%, and 30.6% YoY, respectively.
• Valuation Multiples: As per valuation metrics, forward EV/Sales, Price/Earnings, and EV/EBITDA, multiples of the Company are currently lower as compared to the corresponding multiples of the Homebuilding and Construction Supplies sector.
• Macroeconomic Uncertainties: The market sentiments can remain weak in the short-term due to 40-year high inflation, subdued consumer disposable income, geopolitical tensions, and political risks.

Share Price Chart  

Conclusion

Based on the higher cash cycle days than its industry median, and price action stance, a "SELL" recommendation on Taylor Wimpey PLC (LSE: TW.) has been given at the current market price of GBX 119.35 (as of 10 August 2023 at 01:33 PM GMT+1).

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 10 August 2023. 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 scenario.

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.

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