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Bellway PLC BWY

Morningstar Rating
GBX 2,608.00 −110.00 (4.05%)
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Company Report

Bellway: Home Sales Rate Treads Water in Spring, but Shares Appeal as Housing Market Data Improves

Homebuyer demand was little changed for Bellway in spring as outlined in the no-moat homebuilder’s June 2024 trading update. Bellway’s weekly private home sales rate of 0.62 home sales per active outlet—covering the four months to June 2024—exhibited relative stability and was broadly consistent with sales activity it reported in early 2024. Still, homebuyer appetite has improved relative to the depths of the housing market downturn in 2023 with Bellway’s spring private sales rate some 7% higher than a year earlier. Bellway shares remain appealing and trade at a 25% discount to our unchanged GBX 3,750 fair value estimate.

Price vs Fair Value

BWY is trading at a 733% premium.
Price
GBX 2,718.00
Fair Value
GBX 9,726.00
Uncertainty
High
1-Star Price
GBX 4,869.50
5-Star Price
GBX 7,634.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Underlying housing demand is likely to benefit from the U.K.’s changing demographics. The ongoing ageing of the population is likely to support demand for new housing over the coming decade as the U.K.'s average household size declines.

Bears

Profit margin recovery is likely to be gradual, owing to soft medium-term house price growth expectations and upcoming incremental built costs for Future Homes Standard compliance.

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Trading Information

Previous Close Price
GBX 2,718.00
Day Range
GBX 2,590.002,724.00
52-Week Range
GBX 1,903.002,898.00
Bid/Ask
GBX 2,608.00 / GBX 2,610.00
Market Cap
GBX 309.20 Bil
Volume/Avg
72,023 / 291,969

Key Statistics

Price/Earnings (Normalized)
12.40
Price/Sales
1.15
Dividend Yield (Trailing)
4.08%
Dividend Yield (Forward)
4.08%
Total Yield
7.12%

Company Profile

Bellway is the U.K.’s fourth-largest residential property developer in terms of both revenue and dwelling completions. Bellway’s vertical integration through the land development, construction, and sales and marketing segments of the residential property development value chain aligns with the typical business model employed by homebuilders in the U.K. market.
Sector
Consumer Cyclical
Industry
Residential Construction
Stock Style Box
Mid Value
Total Number of Employees
3,130

Competitors

Valuation

Metric
BWY
BKG
TW.
Price/Earnings (Normalized)
12.4012.1714.80
Price/Book Value
0.941.581.17
Price/Sales
1.152.151.51
Price/Cash Flow
13.0014.5615.39
Price/Earnings
BWY
BKG
TW.

Financial Strength

Metric
BWY
BKG
TW.
Quick Ratio
0.330.640.79
Current Ratio
5.783.575.37
Interest Coverage
8.8123.0818.49
Quick Ratio
BWY
BKG
TW.

Profitability

Metric
BWY
BKG
TW.
Return on Assets (Normalized)
5.22%6.78%5.48%
Return on Equity (Normalized)
7.58%13.98%7.74%
Return on Invested Capital (Normalized)
7.82%11.33%7.47%
Return on Assets
BWY
BKG
TW.
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