Broker tips: Vistry, Wickes
Analysts at Berenberg trimmed their target price on Vistry from 263p to 252p on Monday, but kept its 'hold' rating on the stock after the housebuilder's first‑half update and cut adjusted pre‑tax profit forecasts by an average of 26% across 2026-28.
Berenberg said the H1 statement offered mixed signals - underlying profit expectations were downgraded again, but shareholders were likely reassured that the group does not expect to raise equity, while new chief executive Adam Daniels has set out what he sees as a sensible plan to make the business more resilient.
Even so, Berenberg said the risk/reward scenario remained neutral and that better opportunities existed elsewhere in the sector among peers with stronger balance sheets, lower valuations and more attractive capital‑return programmes.
Vistry reported a 9% fall in interim revenues to £1.70bn, driven by an 8% drop in volumes to 6,304 units. A weaker operating performance and several strategic initiatives contributed to a swing to a £83m pre‑tax loss, compared with an £81m profit a year earlier. Net debt rose to £469m from £293m.
The FTSE 250-listed group guided to adjusted FY26 PBT of £165m, down from £200m, though this excludes around £40m of partner deals delayed to secure improved terms. For FY27, Vistry expects adjusted PBT of £185m. Berenberg's updated forecasts align with guidance, and it noted Vistry's expectation of ending the year broadly cash‑neutral.
Daniels' strategy review will see Vistry continue with its mixed‑tenure model but operate in a smaller, simplified form targeting 12,000 units a year and 30% return on capital expended. Berenberg added that Vistry currently trades on 9x its 2027 earnings.
Shore Capital left its 'buy' rating on Wickes unchanged on Monday but said it had trimmed near‑term estimates following the retailer's latest update, while maintaining a broadly cautious stance on the trading backdrop.
The broker said Wickes continued to face a difficult market, with subdued DIY demand and ongoing cost pressures weighing on performance. Even so, Shore Capital highlighted areas of resilience, noting that management remained focused on operational discipline, tight cost control and strengthening the balance sheet.
Wickes has continued to streamline its operations and optimise its store estate, with Shore Capital pointing to ongoing initiatives aimed at improving returns and sharpening the group's focus on core categories. It also said liquidity had improved and leverage was moving lower, supported by disciplined working‑capital management and recent progress on debt reduction.
Shore Capital, which reiterated its 240p target price on the stock, added that Wickes was emerging as a leaner, more focused business, though it cautioned that the near‑term trading environment remained challenging. It stated the group was well positioned to benefit from a recovery in home‑improvement spending when demand normalises, supported by its value‑led proposition and strong brand recognition.
Overall, Shore said it continued to view Wickes as a steady operator in a pressured market, with improving financial flexibility but limited catalysts in the short term.
Reporting by Iain Gilbert at Sharecast.com