Berkeley to raise FY guidance, JP Morgan predicts

JP Morgan put Berkeley Group on 'positive catalyst watch' and told investors to expect the housebuilder to increase guidance at its first-half results.

Recent data has shown an improvement in the London property market, where Berkeley operates, JP Morgan said. Interim pretax profit is likely to be £20m better than guidance of £260m when Berkeley reports on 8 December, the bank predicted.

JP Morgan predicted adjusted annual pretax profit of £545m - 3% more than consensus. The bank kept its 'overweight' rating on Berkeley shares and trimmed its target price to £55 from £58.48.

"We expect a beat and raise from Berkeley next week. In this context and with the stock trading on an attractive valuation, we place Berkeley Group on positive catalyst watch," JP Morgan analyst Rajesh Patki wrote in a note to clients.

Berkeley shares rose almost 1% to £44.71 at 11:53 GMT.