Charlie Campbell, an analyst from Stifel Nicolaus, maintained the Hold rating on Vistry Group (VTY – Research Report). The associated price target was raised to p630.00.
Charlie Campbell’s rating is based on a combination of factors that reflect both the challenges and potential opportunities facing Vistry Group. The company’s FY24 results showed a significant decline in profit before tax due to cost overruns and delays in sales, although these results were slightly better than the revised guidance. Looking forward, there is an expectation of progress in FY25, with profits anticipated to align with consensus estimates, but the company has cautioned that growth will be more pronounced in the second half of the year.
Despite the challenges, there is potential upside as Vistry transitions to a higher return partnership model. However, the company still faces hurdles, such as the need to address cost underestimation issues and the anticipated weak performance in the first half of FY25. These factors contribute to the Hold rating, as the shares may not outperform until these issues are resolved, despite the theoretical upside and a current valuation discount of approximately 10%.