Vistry: Margin Gains and Strategic Strength Offset by Volume Weakness and Limited Outlook Visibility, Justifying a Hold Rating

Analyst Peter Ajose-Adeogun of Morgan Stanley maintained a Hold rating on Vistry Group, with a price target of p660.00.

Peter Ajose-Adeogun has given his Hold rating due to a combination of factors that balance operational positives against lingering concerns. Vistry delivered profit before tax broadly in line with market expectations, and profitability benefited from a notable improvement in margins, helped by a more favourable mix of tenures and regions as well as higher land sales. Average selling prices also rose, supporting earnings quality despite a tougher sales backdrop. However, overall volumes and sales rates were weaker than anticipated, with private rental sector partners pausing activity and open market demand softening amid macro and policy uncertainty.

At the balance sheet level, net debt improved but not to the extent the market had been hoping for, partly because of heavier land investment and delays in partner deals linked to late-year market volatility. Forward sales are down year-on-year, underscoring a less robust near-term revenue pipeline. In addition, the company’s outlook commentary for 2026 lacked detailed guidance, with more clarity deferred until after the spring selling season. While Vistry highlights its strong strategic position in UK affordable housing and potential long-term catalysts from government programmes and regulatory developments, these positives are tempered by volume shortfalls and an incomplete outlook, leading Peter Ajose-Adeogun to maintain a neutral, or Hold, stance on the shares.