Berkeley Group (BKGFY) AI Stock Analysis

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Berkeley Group

(OTC:BKGFY)

Rating:72Outperform

Price Target:

$11.00

▲(12.94% Upside)

Berkeley Group's strong valuation and financial performance are the most significant factors, with an attractive P/E ratio and dividend yield. However, technical indicators suggest bearish momentum, and cash flow management needs improvement. The absence of earnings call and corporate events data did not impact the score.

Berkeley Group (BKGFY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.76B

Dividend Yield5.59%

Average Volume (3M)71.93K

Price to Earnings (P/E)10.4

Beta (1Y)0.55

Revenue Growth2.82%

EPS Growth-96.09%

CountryUS

Employees2,610

SectorConsumer Cyclical

Sector Strength81

IndustryResidential Construction

Share Statistics

EPS (TTM)0.47

Shares Outstanding478,628,020

10 Day Avg. Volume47,999

30 Day Avg. Volume71,931

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.10

Enterprise Value/Revenue2.06

Enterprise Value/Gross Profit7.84

Enterprise Value/Ebitda10.36

Forecast

1Y Price Target

$11.00

Price Target Upside12.94% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Berkeley Group Business Overview & Revenue Model

Company DescriptionThe Berkeley Group Holdings plc, together with its subsidiaries, engages in the residential-led and mixed-use property development activities in the United Kingdom. It operates under the Berkeley, St Edward, St George, St James, St Joseph, and St William brand names. The company was founded in 1976 and is headquartered in Cobham, the United Kingdom.

How the Company Makes MoneyBerkeley Group generates revenue primarily through the sale of residential properties, which include private homes, affordable housing units, and mixed-use developments. The company profits from the development process, which involves acquiring land, obtaining planning permissions, and constructing homes. Key revenue streams include direct sales of completed homes, as well as revenue from joint ventures and partnerships with local authorities and housing associations. The company also benefits from long-term land holdings and strategic partnerships that enable it to secure profitable development opportunities. Additionally, Berkeley Group's focus on sustainable building practices and community involvement enhances its brand reputation, potentially leading to higher sales and customer loyalty.

Berkeley Group Earnings Call Summary

Earnings Call Date:Jun 20, 2025

(Q2-2024)

% Change Since: |

Next Earnings Date:Dec 05, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mixed performance, with Berkeley Group maintaining strong financial metrics and stable sales prices amidst challenging market conditions, including reduced private sales and regulatory hurdles. The extension of profit guidance indicates confidence in future performance, yet regulatory and planning challenges pose significant hurdles.

Q2-2024 Updates

Positive Updates

Profit Before Tax Exceeds Guidance

Berkeley Group reported a profit before tax of GBP 298 million, slightly ahead of guidance, with an operating margin of 19.5%.

Strong Financial Position

Net cash has been maintained above GBP 400 million, with shareholders' funds increasing by GBP 82 million to GBP 3.4 billion.

Stable Sales Prices and Margins

Despite a 1/3 reduction in private sales, sales prices remained stable, and build cost inflation is negligible.

Extended Profit Guidance

The guidance has been extended to deliver at least GBP 1.5 billion of pretax profit over the three years ending April 2026.

Land Holdings and Forward Sales

Berkeley has cash due on forward sales covering the next three years of GBP 2 billion, providing strong visibility on near-term earnings.

Negative Updates

Private Sales Drop

Private sales are down by 1/3 compared to last year due to elevated interest rates.

Regulatory and Planning Challenges

The uncertainty in the current planning and regulatory system is resulting in delays and increased costs, impacting the pace of home delivery.

Earnings Per Share Decrease

Earnings per share decreased by 1% to 198.3p, mainly due to the impact of a higher corporation tax rate.

Decreased Revenue

Revenue decreased by 1% to GBP 1.2 billion, with lower volumes partially offset by higher average selling prices.

Company Guidance

In the earnings call for the six months ending October 31, 2023, Berkeley Group executives provided detailed guidance and performance metrics. The company reported a pretax profit of GBP 298 million, exceeding previous guidance, with an operating margin of 19.5% and net cash maintained above GBP 400 million. The firm aims to deliver at least GBP 1.5 billion of pretax profit over the three years ending April 30, 2026. Despite a 1% drop in earnings per share to 198.3p, they managed to keep the pretax return on equity at 17.7%. The sales market faced challenges, with private sales down by a third, but sales prices remained stable, and build cost inflation was negligible. Berkeley's forward sales cover the next three years, totaling GBP 2 billion, providing strong visibility on earnings and cash flow. Shareholders' funds increased to GBP 3.4 billion, and the net asset value per share rose by 3.8% to GBP 32.19. The company plans to maintain its robust balance sheet and capital allocation strategy, with ongoing annual shareholder returns of GBP 283 million until September 2025. If new investments are not made by April 2027, Berkeley intends to return 100% of the net profit earned from FY24 to FY27 to shareholders.

Berkeley Group Financial Statement Overview

Summary

Berkeley Group shows strong profitability and a robust balance sheet with low leverage. However, inconsistent revenue growth and cash flow volatility present challenges. The company is financially sound but needs to stabilize cash flow for enhanced financial flexibility.

Income Statement

Positive

Berkeley Group's income statement shows a solid gross profit margin and consistent EBIT and EBITDA margins over the years, indicating stable operational efficiency. However, the net profit margin has slightly declined in the most recent year, and revenue growth has been inconsistent, with a significant drop in the previous year followed by a recovery. Overall, the company demonstrates strong profitability but faces challenges in maintaining consistent revenue growth.

Balance Sheet

Positive

The balance sheet reflects a healthy financial position with a low debt-to-equity ratio, indicating prudent leverage management. The return on equity is strong, suggesting effective use of equity capital to generate profits. The equity ratio is stable, highlighting a solid capital structure. Overall, the company maintains a robust balance sheet with low financial risk.

Cash Flow

Positive

Cash flow analysis reveals fluctuations in free cash flow growth, with a notable decline in the most recent year. The operating cash flow to net income ratio is relatively low, indicating potential challenges in converting income into cash. However, the free cash flow to net income ratio remains strong, suggesting efficient cash management. The company needs to focus on stabilizing cash flow generation to enhance financial flexibility.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.55B	2.49B	2.46B	2.55B	2.35B	2.20B
Gross Profit	671.40M	660.30M	644.50M	696.80M	664.80M	635.30M
EBITDA	508.10M	561.70M	482.00M	527.60M	513.60M	508.20M
Net Income	381.70M	382.00M	397.60M	465.70M	482.40M	422.70M
Balance Sheet
Total Assets	6.84B	6.69B	7.00B	6.86B	6.59B	5.55B
Cash, Cash Equivalents and Short-Term Investments	1.13B	1.02B	1.19B	1.07B	928.90M	1.43B
Total Debt	663.70M	682.20M	664.40M	665.10M	665.90M	303.20M
Total Liabilities	3.33B	3.13B	3.44B	3.53B	3.45B	2.38B
Stockholders Equity	3.51B	3.56B	3.56B	3.33B	3.14B	3.18B
Cash Flow
Free Cash Flow	340.30M	192.10M	232.00M	408.50M	-130.80M	329.30M
Operating Cash Flow	341.80M	193.10M	233.40M	410.50M	-129.50M	331.70M
Investing Cash Flow	-6.70M	-4.00M	60.90M	-12.80M	-27.70M	-6.60M
Financing Cash Flow	-282.30M	-365.90M	-172.70M	-256.20M	-342.10M	-535.80M

Berkeley Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.74

Price Trends

50DMA

9.89

Negative

100DMA

10.58

Negative

200DMA

10.14

Negative

Market Momentum

MACD

-0.08

Positive

RSI

45.59

Neutral

STOCH

71.34

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKGFY, the sentiment is Negative. The current price of 9.74 is below the 20-day moving average (MA) of 9.95, below the 50-day MA of 9.89, and below the 200-day MA of 10.14, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 45.59 is Neutral, neither overbought nor oversold. The STOCH value of 71.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BKGFY.

Berkeley Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MHO	80 Outperform	$4.15B	8.40	17.56%	―	7.39%	-1.37%
SKY	78 Outperform	$4.35B	19.84	14.39%	―	16.87%	54.47%
MTH	76 Outperform	$5.84B	9.37	12.58%	2.04%	-3.72%	-23.00%
TMHC	76 Outperform	$7.10B	8.30	15.59%	―	13.77%	28.57%
KBH	73 Outperform	$4.62B	8.98	14.07%	1.52%	3.65%	-0.61%
BKGFY	72 Outperform	$4.76B	10.44	10.62%	5.59%	2.82%	-96.09%
Sector *	61 Neutral	$18.02B	12.77	-0.74%	3.01%	1.30%	-13.03%

* Consumer Cyclical Sector Average

Performance Comparison

BKGFY

Berkeley Group

9.74

-3.32

-25.42%

KBH

KB Home

65.92

-12.54

-15.98%

MHO

M/I Homes

152.96

-0.56

-0.36%

MTH

Meritage

79.09

-14.81

-15.77%

SKY

Champion Homes

74.54

-12.93

-14.78%

TMHC

Taylor Morrison

70.00

6.37

10.01%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 10, 2025