Barratt: U.K. Homebuyer Confidence Continues To Improve in 2023; Shares Remain Attractive

Barratt Developments’ May 2023 trading update offered investors further evidence that U.K. homebuyer confidence is progressively recovering in 2023. Barratt’s calendar 2023 year-to-date weekly private sales rate rose to 0.65 homes per sales outlet, implying a solid improvement in recent months that tracks in line with peer performance and represents an approximate doubling of sales activity relative to the final quarter of 2022, when forward orders crashed as U.K. mortgage interest rates jumped. Barratt’s share price has retraced substantial lost ground in recent months, rallying 21% in 2023 year to date. Still, shares in the no-moat stock remain compelling, trading at a 29% discount to our unchanged GBX 710 fair value estimate.