(Sharecast News) - Analysts at Berenberg lowered their target price on shares of British construction firm Taylor Wimpey slightly, from 200.0p to 190.0p, noting that the better volumes seen year-to-date appeared to have come at the expense of margins.
Berenberg said strong sales rates and better-than-anticipated volumes at Taylor Wimpey should deliver 2019 numbers in line with current expectations - which it described as a "solid achievement" given the company's slightly lighter first-half performance.
However, the German broker cautioned that better volumes had come at the expense of margins and that it expects further compression in 2020.
Despite this, Berenberg said the group's strong landbank, excellent cash generation and £500.0m net cash position should ensure that its 11% dividend yield was maintained.
"Outside of these short-term uncertainties, the medium-term strategy remains intact," said Berenberg.
The analysts also highlighted how Taylor Wimpey's longer term objective for margins of 21.0-22.0% was maintained and ow the group was scheduled to return roughly 25% of its market capitalisation over the next two years.
Hence, Berenberg stood by its 'buy' rating on Taylor Wimpey.
Taylor Wimpey (TW.)3 May 2024 13:37
