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04 May 2020 | 10:12

Citi raises target on Bellway, highlights "strong" order book and balance sheet

(Sharecast News) - Analysts at Citi lifted their target price on shares of Bellway even after tweaking their profit estimates to factor in a slower ramp-up in construction activity. The group, which was set to restart operations from 4 May, continued to have a "strong" order book of approximately ?1.6bn and because of the gradual recovery was likely to remain so in 2021, they said.

Bellway was also deemed to have a "strong" balance sheet and management was expected to exercise "prudence".

"While there remains uncertainty around the strength of the underlying demand backdrop and clarity around this is only likely to come once sales offices recommence operations, we believe the group balance sheet remains in good shape to manage current challenges and management is likely to maintain a prudent stance flexing the pace of activity to current market conditions," Citi said.

Combined with a valuation of roughly one times its price-to-book multiple, the stock was said to be "relatively attractive".

Citi raised its target price for the shares to 2,958p and kept its recommendation at 'buy'.
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