Financial Trading Blog

Stock of the day 02/09/2016 – Barratt Developments PLC



Can Barratt Developments reassure investors that it’s not struggling post-Brexit when it reveals its full year figures next Wednesday?


It’s safe to say that the housing sector, market-wise at least, is not in a good place. While its components aren’t lingering at the lows struck in the immediate aftermath of the Brexit result neither have they recovered all of their losses, causing sector-leader Berkeley Group to be booted out of the FTSE 100 in the latest reshuffle. Barratt Developments is no different; a gradual decline across the first half of 2016 had still kept the stock flirting with £6, only for it to plunge to £3.26 as Britain chose to leave the EU. The company did admittedly have a strong August, and now sits at a current trading price of £4.89 (IT-Finance.com, 02/09/2016).

Barratt Develpoments PLC Chart September 2016 Spreadex Financial Spread Betting
(Source: IT-Finance.com 02/09/2016)

Back in July Barratt addressed both the Brexit and its full year figures with its latest trading statement. The company claimed it expects its annual profits to have risen around 20% to £680 million, in part thanks to a 5.3% increase in competitions to 17,319. In regards to the referendum CEO David Thomas trotted out the same line as most companies at the time, stating that it was ‘too early to say what the impact of the uncertainty facing the UK economy will be’ while reassuring investors that the company remains ‘confident in the positive fundamentals’ of both the business specifically and the sector in general.

So, with its full year figures next Wednesday Barratt has the double pressure of matching those pre-tax profit estimates while providing investors with a slightly more substantial comment on the post-Brexit landscape. The latter point will likely be the one that dominates headlines, for though we are only just over 3 months on from the referendum that should have been enough time for Barratt to identify any slowdown in demand.

Barratt Developments PLC has a consensus rating of ‘Hold’ alongside an average target price of £5.40.

MARKET ANALYSIS

RECENT POSTS

DISCLAIMER


Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.

Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.

No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.

The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.machibet77.com.