Berkeley Group (Q1 update 5 September)
Full-year results from the firm saw Berkeley upgrade its targets for the coming years, but there was caution over the outlook for the key London market. We will get further detail on this at the first quarter (Q1) update, which will likely be key for share price direction. Strong forward sales and a well-maintained balance sheet do mean that the firm is well prepared for any downturn, something to bear in mind as the country heads towards key Brexit deadlines. At ten times forward earnings the shares are now priced in line with their five-year average, having been one standard deviation above it earlier in the year.
Berkeley’s shares have dropped back from their mid-year highs to the crucial £36.00 support zone. This has held since the middle of July, as it did in February and March. A break below this brings the July low of £35.00 into play. A recovery above £37.00 breaks the current narrow trading range, and would suggest a move back towards £39.08 in the near term.