Financial Trading Blog
Stock of the day 11/08/2016 – Bovis Homes Group PLC
Things had been going pretty well for Bovis Homes before the Brexit vote; while it didn’t look like it was going to scale the heights of the £12 all-time highs it struck last year, the stock had climbed to an effective 2016 peak of £10.28 on the eve of the referendum results. You can probably guess what happened next, however. Bovis Homes plunged 24% in the space of one trading session (and went even lower during the day’s trading) as Britain chose to leave the EU, eventually closing at a 40 month nadir of £7.77. Since then it has managed to climb back to £8 but not much higher, the stock sitting at a current trading price of £7.93 (IT-Finance.com, 11/08/2016).
(Source: IT-Finance.com 11/08/2016)
While not the first company to update in the aftermath of the Brexit result, just under a fortnight after the referendum Bovis Homes released a trading statement with the intention of reassuring investors about the state of its business. The firm revealed it built a record number of homes in the first half of the year, up 5% to 1601, with a 15% surge in average sale price to £255k, while also claiming that it was ‘too early to assess the impact of the EU referendum on the UK housing market’.
That reasoning likely won’t hold water this time around, with the Bovis Homes now having had more than a month to see if there has been any post-Brexit impact. The latest figures from the sector would suggest there has been, with housing prices growing at their slowest pace for 3 years across July. The company, then, will be under pressure to deliver a more comprehensive statement on the effects of the referendum result, something that will matter far more to investors than the now somewhat irrelevant first half figures.
Bovis Homes Group PLC has a consensus rating of ‘Hold’ with an average target price of £10.11.
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