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Taylor Wimpey Fundamentals (TW.)

JP Morgan's 23 UK share tips for 2017 - By Lee Wild | Thu, 22nd December 2016 - 11:10

There's lots to worry about in 2017, not least new US president Donald Trump and potential problems for established politicians in elections across Europe. However, analysts at JP Morgan remain optimistic, and have named their favourite UK equities for 2017.

"We think that equities have a window of opportunity to perform over the next quarters, as the initial benefits of reflation are priced in," says JPM. "We advise a constructive stance on stocks for 2017."

Three key drivers of the business cycle are "looking better", it says. All three were bearish a year ago, but the yield curve is steepening again, credit conditions are improving and corporate tax cuts and repatriation of international cash should, at least, provide an earnings boost to US companies.

Inflows of cash could also return to equities, thinks JPM.

"Equities are a real asset class, which typically benefits from inflation picking up, given better corporate pricing power and higher revenues," the broker explains. Equities typically post their best returns in the low positive inflation backdrop.

"We see this period as having similarities to 1988, or 1999, the past episodes which followed big mid-cycle selloffs in oil price. The key risks to our constructive equity call are the prospect of more aggressive bond repricing if the Fed falls behind the curve, Euro politics, liquidity squeeze in emerging markets given stronger US dollar, and of eventual recessionary profit rollover, given that US is still in what is a late cycle."

For the UK specifically, JPM recently downgraded its view in the fourth quarter from 'overweight' to 'neutral'. It's now moved to 'underweight' as it believes benefits from the weak pound are largely priced in. Domestic activity is also expected to slow materially next year due to Brexit uncertainty.

What's more, UK shares have already seen significant earnings upgrades, and profits are now expected to grow by 19% in 2017.

"Most of this is due to commodities, but no sector, including domestic ones, is projected to have down earnings," explains JPM. "This might prove to be too optimistic if the economy weakens and the uncertainty over Brexit negotiations increases."

JPM worries about a squeeze on consumer purchasing power in 2017 and that the real fallout from Brexit is yet to come. It also points out that the UK is packed with high-yielding defensives, and it may underperform against a backdrop of rising yields.

However, the broker still has 23 companies it thinks are worth buying for 2017. It's also revealed its 16 least preferred stocks.

Always Good to read experts . . . but where were they BEFORE the 2007-8 crash occurred?
I posted this on Michelmesh, but it may apply here too
....any thoughts?
FWIW I bt when sp was abt. 40p -so my Yield's good ( well NOT that good! )...

...here it is....
. . . . . . the UK-Gov is to build (2017 with Chinese help!) five factories to make "Kit-homes" - I'm guessing the finish won't be real-bricks, rather a sand-plastered, or grit exterior, with weatherboarding to break large swathes of flat areas.
=So-called Garden Villages.
Unless TW. is involved, I can see the profits hit as conventional houses remain unsold, while Buyers look at their Options . . . waiting 6-months might mean joining a New Village-community and having enough dosh for that new car.
Time will tell if such houses withstand the British Weather ( a good reason for Traditional )- but kit-build should improve quality and cut-costs . . . as well as Building-time ( which is money!).
Anyone see any of these 2017 kit-houses?

no reason why kit-built wood-frame houses should not last well
it's not exactly new technology

4 Jan: Deutsche raises its TP from 218p to 239p.

hangon - MarCity (MAR) were into that exact market, prefabricating sections of a house and then assembling on site. Although they still exist as a company, somehow they got the sums wrong and hit financial troubles.

Trading statement for the year ended 31 December 2016

Taylor Wimpey is issuing the following update on trading ahead of its full year results for the year ended 31 December 2016, which will be announced on 28 February 2017.

Overview
Pete Redfern, Chief Executive, commented:

"We are pleased to report good progress in 2016, with an increase in housing completions and robust trading despite wider macroeconomic uncertainty. In a market characterised by solid fundamentals, we ended the year with a strong forward order book and made good progress against our enhanced medium term targets. We expect to deliver full year profitability at the upper end of market consensus†. Looking ahead, we remain confident that our disciplined strategy will enable us to continue to deliver value over the long term."

UK current trading
Against the backdrop of a stable housing market in 2016, we continued to see good demand and solid trading into the second half of the year, despite wider macroeconomic uncertainty. Customers continue to benefit from a wide range of mortgage products and low interest rates with customer confidence remaining robust. We have continued to make good progress towards each of our enhanced medium term targets during 2016.

In 2016 total home completions increased by 4% to 13,881, including our share of joint venture completions (2015: 13,341). During 2016 we delivered 2,663 affordable homes (2015: 2,509), equating to 19% of total completions (2015: 19%). Our net private reservation rate for 2016 was 0.72 homes per outlet per week (2015: 0.73). Cancellation rates remained low at 13% (2015: 12%). The mix impact of better quality locations continued to have a positive impact with average selling prices on private completions increasing by 13% to £286k (2015: £254k). Our overall average selling price increased by 11% to £255k (2015: £230k).

We ended 2016 with a year end order book valued at £1,682 million as at 31 December 2016 (31 December 2015: £1,779 million), excluding joint ventures, with a small fall in the average selling price largely due to a number of high value Central London completions in December 2016. This order book represents 7,567 homes (31 December 2015: 7,484 homes). We enter 2017 with 285 outlets (31 December 2015: 297).

Land portfolio and planning
The short term land market continued to be positive throughout 2016. As planned, we operated at broadly replacement levels.

As at the end of December 2016, our short term landbank stood at c.76k plots (2015: c.76k plots), having successfully converted over 9k plots from the strategic pipeline into the short term landbank (2015: c.9k). Looking ahead, we remain mindful of the wider macroeconomic uncertainty created by the outcome of the EU Referendum. In line with our disciplined strategy and with the benefit of a long landbank and underpin of strategic pipeline, we will continue to be selective in further land investment.

Spain current trading
The Spanish market continued to be positive. We completed 304 homes in 2016 (2015: 251) at an average selling price of €358k (2015: €315k). The total order book as at 31 December 2016 stood at 293 homes (31 December 2015: 270 homes).

We expect to report a significantly improved operating profit* for the Spanish business in 2016 (2015: £10.0 million operating profit*).

Group financial position
In 2016, the first year of operating towards our enhanced medium term targets, the Group expects to report an improved operating profit* margin of c.20.8% (2015: 20.3%) and a return on net operating assets** of over 30% (2015: 27.1%).

We ended the year in a strong position with net cash of c.£365 million (31 December 2015: £223.3 million net cash), due to the strength in underlying trading and after the payment of £355.9 million of dividends to shareholders in 2016 (2015: £308.4 million).

We remain confident in our ability to pay significant dividends through the cycle, and are focused on our medium term target for dividends which is to pay a total of £1.3 billion of dividends in cash to shareholders over the period 2016-2018.

Outlook
We start the year in an excellent financial and operational position with significant embedded value in our short term landbank and strategic pipeline. We expect to demonstrate further progress throughout 2017 against all of our medium term targets, delivering increased returns for our shareholders and focusing on areas of the operational business where we can add value, including driving further improvements in our customer service processes and product quality.

Peel Hunt Buy 174.00 210.00 210.00 Retains

Shore Capital Hold 174.00 - - Reiterates

Liberum Capital Hold 174.00 150.00 150.00 Reiterates

Beaufort Securities Buy 171.15 - - Retains

Deutsche Bank Buy 171.15 239.00 244.00 Reiterates

I prefer the latter TP.

StockMarketWire.com

House builder Taylor Wimpey hiked its FY pretax profit to �732.9m, from �603.2m, in what it said was an excellent performance against a backdrop of political and economic uncertainty.

Revenue was �3.7bn, from �3.1bn.

The company said it had made a very good start to 2017 and was encouraged by robust trading and levels of demand. The UK housing market fundamentals remain good with strong customer confidence in core geographies.

"The market is underpinned by a competitive mortgage market and low interest rates. Customer interest remains high, with website visits solid and customers continuing to register interest in forthcoming developments and progress their home purchase plans," said Taylor Wimpey.

"Whilst the wider London market remains robust, prime central London is softer, as previously highlighted, however, house prices are stable, and there are good levels of underlying demand."

The net private sales rate for the year to date (w/e 19 February 2017) has increased to a very strong 0.91 (2016 equivalent period: 0.77).

Taylor Wimpey said it was continuing to focus on building a strong order book for the future. As at Feb. 19, it was about 49% forward sold for private completions for 2017, with a total order book value of �1.98bn, excluding joint ventures.

"This order book represents 8,573 homes (2016 equivalent period: 8,409). 58% of Central London private completions for 2017 are forward sold, as at 19 February 2017 (2016 equivalent period: 76%)," it said, adding it welcomed the measures set out in the Housing White Paper.

"We expect underlying build cost increases during 2017 to be at a similar level to 2016, at around 3-4%."

Taylor Wimpey said the early signs of stability and resilience of the market following the EU referendum, which were encouraging, continued and it believed the risk of material impact from this in the short term has significantly reduced.

"In line with our strategy, we will continue to closely monitor market risks, particularly around long term mortgage cost. However we believe that a cautiously regulated market and low interest rate environment is likely to prolong the period of stability that we are seeing in the UK housing market."





Story provided by StockMarketWire.com

Manuel,

Interesting article recalling what you posted some weeks ago.

"Builders turn to bolt-together homes in Brexit Britain"

http://uk.reuters.com/article/uk-britain-eu-construction-insight-idUKKBN16G1DC?feedType=nl&feedName=ukdailyinvestor&utm_source=Sailthru&utm_medium=email&utm_campaign=UK%20Technology%20Roundup%202017-03-09&utm_term=UK%20Technology%20Roundup



-=-=

I was thinking of reducing my hold of TW..

forgotten who that chap was who kept poo-pooing me about prefabs and housing from shipping containers etc
perhaps he's keeping his head below the parapet!

What accounts for the SP drop over last few days.

Is it :

1) x-div (9.2p Special Div)?
2) slow down in house prices?
3) election jitters?
4) or am I missing something?

By StockMarketWire | Wed, 31st May 2017 - 09:20
Deutsche Bank today reaffirms its buy investment rating on Taylor Wimpey PLC (LON:TW.) and raised its price target to 243p (from 241p).

SP drop due to a combination of the first 3, as for No 4 you are very short-sighted because you can't see past Corbyn.

I'd say principally 1 and 2. Often prices are driven up prior to a good divi and then tails off in the days/weeks after.

As my holding was bought at 26p many moons ago I'm not massively worried. :)

Thanks,

I have a lot too many of them.

-=--=-=

George,

May not be able to see past Corbyn, but can see through Mother Theresa.

Election jitters. Looking at my portfolio I have a variety of stuff where it's falling on low volume for no particular reason.

Low volume indicates people cutting risk and other sitting on sidelines waiting.

Construction figures good late last week
Manufacturing figures good today
Exchange rate going in correct direction

It's all about de-risking before the election I guess

My monitor has tlw followed by tw.

They seem to be falling together !

Is that your monitor or TLW.

Uggh,

I am holding. Hope I don't regret doing so.

Actually tempted to buy a few more. But. But. But.