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Barratt Developments (BTDPY)
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Barratt Developments (BTDPY) AI Stock Analysis

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BTDPY

Barratt Developments

(OTC:BTDPY)

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Neutral 63 (OpenAI - 4o)
Rating:63Neutral
Price Target:
$11.50
▲(8.80% Upside)
Barratt Developments' overall stock score is driven by strong earnings call performance and strategic initiatives, despite financial performance challenges and technical indicators suggesting potential short-term volatility. The high P/E ratio indicates potential overvaluation, but the attractive dividend yield provides a counterbalance.

Barratt Developments (BTDPY) vs. SPDR S&P 500 ETF (SPY)

Barratt Developments Business Overview & Revenue Model

Company DescriptionBarratt Redrow Plc engages in the development of residential and non-residential properties mainly in the United Kingdom. It offers services in land, design, construction, and sales and marketing. The company was founded by Lawrence Arthur Barratt in 1958 and is headquartered in Coalville, the United Kingdom.
How the Company Makes MoneyBarratt Developments generates revenue primarily through the sale of residential properties, which includes both private and affordable homes. The company's revenue model is driven by the successful acquisition of land, which is then developed into residential projects. Key revenue streams include the sales of finished homes, which are often sold on a forward basis, allowing the company to secure funding and manage cash flow effectively. Additionally, Barratt benefits from partnerships with local authorities and housing associations, which can provide support and funding for affordable housing projects. The company also leverages economies of scale in construction and procurement, which helps in optimizing costs and enhancing profit margins.

Barratt Developments Earnings Call Summary

Earnings Call Date:Sep 17, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Feb 11, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements such as the successful Redrow integration, strong financial health, and operational resilience. However, the company faced notable challenges including market difficulties, a decrease in total completions, and ongoing building safety provisions. Despite these challenges, the company's strong financial position and strategic initiatives provide confidence in future growth.
Q4-2025 Updates
Positive Updates
Successful Redrow Integration
Completion of the majority of the Redrow integration, delivering cost synergies well ahead of target with GBP 69 million confirmed in the year and GBP 20 million crystallized in FY '25, double the previous forecast.
Strong Financial Position
The company ended the year with a strong net cash position of GBP 773 million, supporting growth and capital allocation plans, despite paying GBP 249 million in dividends and GBP 50 million on share buybacks.
Operational Achievements
Delivered 16,500 homes in a challenging market and improved return on capital employed to 10.7% from 9.5%.
Positive Customer Feedback
Achieved highest ratings of Excellent for all three brands on Trustpilot, reflecting high customer satisfaction.
Land Bank Margin Improvement
Land bank margin improved by 90 basis points to 19.2% at the end of June, with a focus on reaching a 23% gross margin hurdle rate.
Negative Updates
Market Challenges
The market remained challenging with affordability constraints and low consumer confidence due to political and economic uncertainty.
Decrease in Total Completions
Total home completions decreased by 8% year-over-year, primarily due to a reduction in affordable completions.
Building Safety Provisions
Increased building safety provisions, including GBP 109 million for developments in the Southern region and GBP 105 million for Redrow developments, related to concrete frame issues.
Outlet Growth Delays
Expectations for outlet numbers in FY '26 to remain largely flat, with growth anticipated only from FY '27 due to slow planning reforms.
Company Guidance
During the Barratt FY '25 call, the company provided various metrics and guidance on its performance and strategy. The company delivered 16,565 homes, despite a challenging market, which was a slight decrease from FY '24. They reported an adjusted profit before tax of GBP 591.6 million, with a gross margin improvement of 30 basis points to 17.4%. The integration of Redrow was a significant highlight, with GBP 69 million in cost synergies confirmed, including GBP 20 million crystallized in FY '25, doubling previous forecasts. The net cash position stood strong at GBP 773 million, even after significant expenditures, including GBP 249 million in dividends and GBP 50 million in share buybacks. The return on capital employed improved to 10.7%, and the reservation rate increased to 0.64. However, total completions were down by 8% due to a reduction in affordable completions, although private completions increased by 3.5%. The average selling price (ASP) saw a 1% inflation, mainly due to larger homes outside London. The company projects outlet numbers to remain flat in FY '26 but anticipates organic growth from FY '27, with a goal of 22,000 home completions in the medium term. They also highlighted a strong land bank with a margin improvement to 19.2% and a focus on improving this further to a hurdle rate of 23%.

Barratt Developments Financial Statement Overview

Summary
Barratt Developments shows strong revenue growth and effective debt management, but faces challenges with declining profit margins and cash flow issues. The company needs to improve operational efficiency and cash flow management to enhance profitability.
Income Statement
65
Positive
Barratt Developments shows a strong revenue growth rate of 33.83% in the latest year, indicating robust sales performance. However, the gross profit margin has decreased from previous years, currently at 14.07%, which may suggest rising costs or pricing pressures. The net profit margin is relatively low at 3.34%, reflecting challenges in converting revenue into profit. The EBIT and EBITDA margins are moderate, indicating operational efficiency but with room for improvement.
Balance Sheet
75
Positive
The company maintains a healthy debt-to-equity ratio of 0.03, showcasing strong financial leverage management. The return on equity (ROE) is modest at 2.37%, suggesting moderate efficiency in generating returns from equity. The equity ratio is strong, indicating a solid capital structure with significant equity backing the assets.
Cash Flow
50
Neutral
Cash flow analysis reveals a significant decline in free cash flow growth, down by 90.06%, which could indicate cash management challenges. The operating cash flow to net income ratio is low at 0.012, suggesting limited cash generation relative to net income. The free cash flow to net income ratio is healthier at 0.38, but overall cash flow performance needs improvement.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue5.58B5.58B4.17B5.32B5.27B4.81B
Gross Profit784.80M784.80M689.00M1.13B1.30B1.12B
EBITDA398.10M398.10M255.70M767.00M1.06B858.90M
Net Income186.40M186.40M114.10M530.30M515.10M659.80M
Balance Sheet
Total Assets11.55B11.55B7.88B8.01B8.22B7.49B
Cash, Cash Equivalents and Short-Term Investments969.60M969.60M1.07B1.27B1.35B1.52B
Total Debt255.20M255.20M242.80M249.60M254.40M246.00M
Total Liabilities3.68B3.68B2.44B2.42B2.59B2.04B
Stockholders Equity7.87B7.87B5.44B5.60B5.63B5.45B
Cash Flow
Free Cash Flow11.20M11.20M89.00M498.70M406.40M1.10B
Operating Cash Flow29.30M29.30M96.20M521.80M436.30M1.11B
Investing Cash Flow195.80M195.80M12.00M55.40M-241.10M-9.70M
Financing Cash Flow-320.80M-320.80M-308.60M-590.60M-378.40M-197.00M

Barratt Developments Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price10.57
Price Trends
50DMA
10.09
Positive
100DMA
11.01
Negative
200DMA
11.02
Negative
Market Momentum
MACD
0.13
Negative
RSI
60.71
Neutral
STOCH
91.24
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BTDPY, the sentiment is Neutral. The current price of 10.57 is above the 20-day moving average (MA) of 10.20, above the 50-day MA of 10.09, and below the 200-day MA of 11.02, indicating a neutral trend. The MACD of 0.13 indicates Negative momentum. The RSI at 60.71 is Neutral, neither overbought nor oversold. The STOCH value of 91.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BTDPY.

Barratt Developments Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$13.56B10.4917.73%0.68%3.26%-6.40%
73
Outperform
$6.71B7.8415.59%13.77%28.57%
69
Neutral
$4.47B9.2313.06%1.55%-0.95%-9.08%
68
Neutral
$5.32B8.5212.58%2.23%-3.72%-23.00%
64
Neutral
$32.03B12.8510.63%1.57%-4.69%-32.95%
63
Neutral
$7.49B30.322.73%4.26%37.52%18.46%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BTDPY
Barratt Developments
10.57
-1.41
-11.77%
KBH
KB Home
64.46
-15.36
-19.24%
LEN
Lennar
126.39
-45.07
-26.29%
MTH
Meritage
69.73
-26.14
-27.27%
TOL
Toll Brothers
140.74
-9.15
-6.10%
TMHC
Taylor Morrison
66.47
-1.41
-2.08%
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: Oct 02, 2025