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Berkeley Group (BKGFY)
OTHER OTC:BKGFY
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Berkeley Group
(OTC:BKGFY)
Select Model
Select Model
Rating:75Outperform
Price Target:
$13.00
▲(18.51% Upside)
Action:ReiteratedDate:09/30/25
Berkeley Group's strong valuation, characterized by a low P/E ratio and high dividend yield, is a significant strength. Financial performance is solid, with strong profitability and a robust balance sheet, though revenue growth inconsistency and cash flow volatility are concerns. Technical analysis shows short-term bullish momentum, but longer-term resistance is present.
Positive Factors
Balance sheet strength
Low leverage, strong ROE and a stable equity ratio give Berkeley durable financial flexibility to fund multi‑year developments, secure land positions and absorb downturns. A robust capital structure reduces refinancing risk and supports long‑term project delivery and shareholder returns.
Operational profitability
Consistent gross and stable EBIT/EBITDA margins reflect disciplined cost control and efficient construction execution. Durable margin performance supports predictable operating earnings, funds reinvestment into projects, and provides a buffer against cyclical revenue swings over the medium term.
Prime market & regeneration expertise
Concentration in London and South East and expertise in urban regeneration give Berkeley lasting competitive advantages: access to premium land, planning relationships and mixed‑use uplift. These structural strengths support pricing power and project returns across development cycles.
Negative Factors
Revenue growth inconsistency
Inconsistent top-line growth reduces visibility into project timing and sales cadence for a developer reliant on phased completions. This unpredictability complicates land acquisition planning and cash forecasting, raising execution risk and making capital allocation harder over coming quarters.
Cash flow volatility
Uneven free cash flow and weaker operating cash conversion constrain the firm's ability to self‑fund land and construction needs. Reliance on external financing or working capital to bridge timing gaps can limit strategic flexibility and pressure dividends or investment during weaker sales periods.
Recent margin pressure
A recent decline in net margin narrows the cushion against rising build or land costs and interest expense. If margin erosion persists, it will reduce ROE and free cash generation, constraining reinvestment into projects and shareholder distributions over the medium term.
Berkeley Group (BKGFY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.61B
Dividend Yield5.18%
Average Volume (3M)46.00K
Price to Earnings (P/E)5.4
Beta (1Y)0.55
Revenue Growth2.82%
EPS Growth-96.09%
CountryUS
Employees2,610
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)0.49
Shares Outstanding471,191,380
10 Day Avg. Volume50,022
30 Day Avg. Volume45,996
Financial Highlights & Ratios
PEG Ratio-3.65
Price to Book (P/B)1.25
Price to Sales (P/S)1.79
P/FCF Ratio23.22
Enterprise Value/Market Cap0.68
Enterprise Value/Revenue1.30
Enterprise Value/Gross Profit4.83
Enterprise Value/Ebitda5.42
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.9
Revenue Forecast (FY)$3.08B
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:Dec 08, 2023
(Q2-2024)
| % Change Since: |
Next Earnings Date:Jun 24, 2026
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 demonstrates strong profitability and a robust balance sheet with low leverage and effective use of equity capital. However, revenue growth inconsistency and cash flow volatility are areas of concern that need addressing to enhance financial flexibility.Income Statement
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.75
Positive
Balance Sheet
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.80
Positive
Cash Flow
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.65
Positive
| Breakdown | TTM | Apr 2025 | Apr 2024 | Apr 2023 | Apr 2022 | Apr 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.42B | 2.49B | 2.46B | 2.55B | 2.35B | 2.20B |
| Gross Profit | 648.39M | 660.30M | 644.50M | 696.80M | 664.80M | 635.30M |
| EBITDA | 577.73M | 561.70M | 591.30M | 527.60M | 569.20M | 531.70M |
| Net Income | 369.25M | 382.00M | 397.60M | 465.70M | 482.40M | 422.70M |
Balance Sheet | ||||||
| Total Assets | 6.58B | 6.69B | 7.00B | 6.86B | 6.59B | 5.55B |
| Cash, Cash Equivalents and Short-Term Investments | 1.34B | 1.02B | 1.19B | 1.07B | 928.90M | 1.43B |
| Total Debt | 681.70M | 682.20M | 664.40M | 665.10M | 665.90M | 303.20M |
| Total Liabilities | 2.98B | 3.13B | 3.44B | 3.53B | 3.45B | 2.38B |
| Stockholders Equity | 3.60B | 3.56B | 3.56B | 3.33B | 3.14B | 3.18B |
Cash Flow | ||||||
| Free Cash Flow | 161.19M | 192.10M | 232.00M | 408.50M | -130.80M | 329.30M |
| Operating Cash Flow | 161.29M | 193.10M | 233.40M | 410.50M | -129.50M | 331.70M |
| Investing Cash Flow | -11.70M | -4.00M | 60.90M | -12.80M | -27.70M | -6.60M |
| Financing Cash Flow | -263.50M | -365.90M | -172.70M | -256.20M | -342.10M | -535.80M |
Berkeley Group Technical Analysis
Negative
10.97
Price Trends
11.26
Negative
10.80
Negative
10.54
Negative
Market Momentum
-0.35
Positive
26.55
Positive
14.66
Positive
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 10.97 is below the 20-day moving average (MA) of 11.23, below the 50-day MA of 11.26, and above the 200-day MA of 10.54, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 26.55 is Positive, neither overbought nor oversold. The STOCH value of 14.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BKGFY.
Berkeley Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.78B | 8.21 | 12.83% | ― | 6.98% | 9.74% | |
75 Outperform | $4.61B | 5.40 | 10.62% | 5.18% | 2.82% | -96.09% | |
74 Outperform | $4.39B | 22.24 | 13.58% | ― | 12.14% | 48.68% | |
71 Outperform | $3.33B | 8.49 | 12.99% | ― | 4.77% | -9.30% | |
70 Outperform | $3.43B | 10.16 | 10.80% | 1.76% | -10.01% | -27.81% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $4.28B | 10.29 | 8.65% | 2.62% | -6.06% | -32.39% |
* Consumer Cyclical Sector Average
BKGFY
Berkeley Group
9.94
0.40
4.19%
KBH
KB Home
54.30
-5.28
-8.86%
MHO
M/I Homes
129.18
13.39
11.56%
MTH
Meritage
64.13
-5.04
-7.29%
SKY
Champion Homes
79.47
-13.89
-14.88%
TMHC
Taylor Morrison
59.98
1.23
2.09%
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.