Investing.com -- Goldman Sachs upgraded British housebuilder Taylor Wimpey to "neutral" from "sell" on Tuesday, saying headwinds in southern England are now largely reflected in consensus forecasts.
The brokerage raised its 12-month price target on Taylor Wimpey to 82 pence from 69 pence, 6% above the 78 pence closing price on Oct 16.
Goldman also pointed to the company's cut in its payout policy to 4% of net assets from 7.5%, which it said is more sustainable and is "removing a major overhang."
Taylor Wimpey shares have fallen about 3% since Goldman added them to its sell list on May 26, while the FTSE World Europe index rose about 0.3% and Goldman's UK housebuilder coverage rose an average of about 0.4%.
On a price-to-book basis, the shares now trade at about a 15% discount to peers for both 2026 and 2027, compared with premiums of 2% and 6% when Goldman downgraded the stock.
Goldman said Taylor Wimpey will still see slower pricing and volume growth than peers because of its exposure to southern England. The company last reported prices running 2% lower than a year earlier, with incentives above 6% versus 4% to 5% at Persimmon.
Goldman raised its volume growth forecasts for traditional housebuilders to 2% in 2027 and 7.0% in 2028 from 1% and 4%, after the government announced "Your First Home," a successor equity-loan scheme.
It lowers the deposit for first-time buyers of new-build homes to 2.5% and offers an initial interest-free government loan of 20%.
Goldman said the scheme would cut monthly debt payments for an average first-time buyer by roughly 16% from a February baseline.
It forecast 2028 volume growth of 9% at Persimmon, 7% each at Taylor Wimpey and Barratt Redrow, and 6% at Bellway. It sees only a minor uplift for Berkeley Group because of premium London prices and marginal benefit for Vistry Group given its partnership model.
Goldman kept "buy" ratings on Barratt Redrow, Persimmon and Vistry, with price targets of 350 pence, 1,630 pence and 340 pence. It kept Bellway at "neutral" with a 2,195 pence target and Berkeley at "sell" with a 3,085 pence target.
Goldman said the main risk to its forecasts is the Oct 28 Autumn Budget, which will define regional property price caps, household income limits and developer contribution rates.
Original Article
Goldman lifts UK housebuilder volume forecasts; upgrades Taylor Wimpey
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