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Barratt Developments (full-year results 6 September)
Barratt is expected to report adjusted earnings of 60 pence per share, up 9.6% on the year, while revenue rises 9.3% to £4.6 billion. It has seen a steady climb in earnings over the past few years, and has managed to beat forecasts, 6 out of the last 8 times on earnings, and seven out of eight in revenue. At a current PE of 10.8, and on a price-to-earnings growth (PEG) rate of 1.1, it remains attractive. Given the uncertainties the sector is currently facing, the firm’s valuation would seem to provide a good margin of safety for the future.
Barratt has been on a great run so far this year, with the price action over the past couple of days pushing above the May high at 624p. Dips should continue to find buyers, so the overall target in coming months remains the 673p high from September 2015.