Analysts bullish on Bovis Homes

Bovis Homes will announce first-half figures for 2014 on Monday 18 August. Consensus is for revenue of £184 million and net profit of £35.7 million.

Bovis house building
Source: Bloomberg

Bovis Homes is trading at £7.70; the share price is down 14% since it revealed a 48% rise in profits, in-line with expectations, in February’s full-year figures for 2013. The company built 2813 homes in 2013 and its target is to build between 3400 and 3600 for 2014.

The government’s Help to Buy scheme, which has been extended to 2020, has assisted the housing sector; however the Bank of England has voiced concerns about the growth rate in the UK property market since, observing that it has put pressure on house builders. Mark Carney has since placed tighter lending controls on mortgages over £500,000 in order to curb the boom, but this should have little impact on Bovis Homes as their average selling price is £195,000.

Equity analysts are bullish on Bovis Homes: out of the 18 recommendations, 14 are buys, three are hold and there is only one is a sell. The share price has bounced off £7.20 several times; a good set of results could push it to £8.04 in the short-term, with £8.40 as the medium-term target.

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