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Bellway plc (GB:BWY)
:BWY
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Bellway (BWY) AI Stock Analysis

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GB:BWY

Bellway

(LSE:BWY)

Rating:61Neutral
Price Target:
2,572.00p
▲(6.11% Upside)
Bellway's overall stock score reflects a mixed financial performance with strong balance sheet but weak income and cash flow statements. Technical analysis indicates bearish momentum, while valuation suggests potential overvaluation. Positive earnings call and corporate events provide some optimism for future growth.
Positive Factors
Financial Performance
Unit completions and adjusted PBT both increased by 12%, indicating strong financial results.
Leadership
The new CFO is expected to sharpen the focus on returns, potentially boosting financial performance.
Negative Factors
Sector Comparison
Shares trade at a 16% discount to the sector on price to book, suggesting undervaluation concerns.
Stock Valuation
Shares trade at a 14% discount to the sector on price to book, reflecting relatively weaker post-tax RoE.

Bellway (BWY) vs. iShares MSCI United Kingdom ETF (EWC)

Bellway Business Overview & Revenue Model

Company DescriptionBellway plc is one of the largest housebuilders in the United Kingdom, primarily focused on the residential property sector. Established in 1946, the company specializes in constructing a wide range of homes, from affordable housing to luxury residences, across various regions in England, Scotland, and Wales. Bellway is committed to sustainable development and aims to provide high-quality homes that meet the diverse needs of its customers.
How the Company Makes MoneyBellway generates revenue primarily through the sale of newly built residential properties. The company secures land plots for development, which are then transformed into housing projects. Revenue streams include the sale of homes to individual buyers, private developers, and housing associations. Key factors contributing to its earnings include the demand for new housing, government initiatives aimed at boosting home ownership, and favorable housing market conditions. Additionally, Bellway often collaborates with local authorities and other stakeholders to ensure the alignment of its developments with community needs, which can enhance its reputation and sales potential.

Bellway Earnings Call Summary

Earnings Call Date:Mar 25, 2025
(Q2-2025)
|
% Change Since: 1.28%|
Next Earnings Date:Oct 14, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a period of strong operational performance with growth in completions, a robust order book, and healthy financial results. However, challenges remain with low RoCE, declining social housing output, significant build safety costs, and cost inflation pressures on margins.
Q2-2025 Updates
Positive Updates
Increase in Home Completions
Home completions increased by 12% to almost 4,600 homes, driving a healthy increase in profit.
Strong Order Book and Land Bank
The order book grew by around 20% to over 4,700 homes, and the company has a strong land bank totaling 95,000 plots.
Healthy Financial Performance
Underlying PBT increased by 11.9% to £150 million, and the interim dividend increased to 21p per share.
Strong Cash Flow and Low Net Debt
The company generated good operating cash flow and ended the period with low net debt of £8 million.
Future Growth Plans
The company is on track to deliver at least 8,500 homes this year, with a target of 10,000 homes by FY '27.
Negative Updates
Low Return on Capital Employed (RoCE)
The return on capital employed is at 9%, which is deemed not good enough, indicating room for improvement.
Social Housing Output Decline
Social output decreased by 5.3% to 960 homes, with the proportion of social completions reducing to around 21%.
Build Safety Costs
The provision for build safety was £502 million, with expected costs of £30 million in the second half and £100 million next year.
Cost Inflation and Margin Pressure
Higher embedded cost inflation remains a headwind to margin, with gross margin at 16.4%.
Increased Overhead Costs
Overhead expenses rose by 10% to £77 million, reflecting higher rewards packages and investments in critical areas.
Company Guidance
During the Bellway call, several key metrics and guidance were highlighted for the fiscal year 2025. The company is targeting the completion of at least 8,500 homes, with 1,900 being social housing units. They reported a 12% increase in completions to nearly 4,600 homes in the first half, which contributed to an 11.9% rise in volume output and a private output growth of 17.5%. The average selling price is projected to be around £310,000, and the operating margin is expected to approach 11%. Additionally, Bellway's order book has grown by 20% to over 4,700 homes, and the company has an extensive land bank totaling 95,000 plots, with more than 30,000 having detailed consent. The company is also focusing on improving capital efficiency, with return on capital employed (RoCE) at 9%, highlighting room for improvement. The interim dividend has been increased to 21p per share, and the company plans to maintain a strong balance sheet with adjusted gearing at 8.5%.

Bellway Financial Statement Overview

Summary
Bellway's financial performance is mixed, with a strong balance sheet highlighted by a low debt-to-equity ratio and robust equity ratio. However, challenges are present in the income and cash flow statements, including declining revenues, reduced profitability, and negative cash flow trends.
Income Statement
65
Positive
Bellway's income statement reveals a decline in revenue from the previous year, with a substantial decrease in net income. The gross profit margin stands at 15.4% and the net profit margin at 5.5%, both lower than industry expectations. The EBIT margin is 8.9%, showing challenges in maintaining operating efficiency. The revenue growth rate is negative, indicating a contraction compared to the prior year. Overall, the income statement reflects a need for strategic improvements to regain growth and profitability.
Balance Sheet
78
Positive
Bellway's balance sheet remains strong, with a low debt-to-equity ratio of 0.04, indicating prudent financial management and low leverage risk. The return on equity is 3.8%, which suggests moderate effectiveness in using equity to generate profits. The equity ratio is robust at 69.3%, showing a stable financial structure. However, the decline in equity from the previous year warrants attention to sustain this position.
Cash Flow
52
Neutral
The cash flow statement shows negative free cash flow growth, indicating challenges in generating cash from operations. The operating cash flow to net income ratio is negative, highlighting cash flow management issues. The free cash flow to net income ratio is also negative, suggesting inefficiencies in converting profits into cash. Improvements in cash management strategies are essential to enhance liquidity and financial flexibility.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.38B3.41B3.54B3.12B2.23B
Gross Profit367.00M687.30M787.00M651.90M422.20M
EBITDA223.70M510.20M314.70M486.80M255.60M
Net Income130.50M365.00M242.60M390.70M192.90M
Balance Sheet
Total Assets5.00B5.11B4.99B4.68B4.08B
Cash, Cash Equivalents and Short-Term Investments119.50M362.00M375.30M460.30M51.40M
Total Debt130.00M513.80M540.60M603.00M410.70M
Total Liabilities1.53B1.65B1.62B1.39B1.09B
Stockholders Equity3.47B3.46B3.37B3.29B2.99B
Cash Flow
Free Cash Flow-66.90M243.40M60.70M429.60M-65.90M
Operating Cash Flow-65.50M246.10M61.20M432.90M-57.60M
Investing Cash Flow-8.00M-18.20M19.10M5.20M-18.10M
Financing Cash Flow-169.00M-241.20M-165.30M-29.20M-74.10M

Bellway Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2424.00
Price Trends
50DMA
2619.68
Negative
100DMA
2602.12
Negative
200DMA
2504.99
Negative
Market Momentum
MACD
-43.33
Negative
RSI
36.60
Neutral
STOCH
29.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BWY, the sentiment is Negative. The current price of 2424 is below the 20-day moving average (MA) of 2477.40, below the 50-day MA of 2619.68, and below the 200-day MA of 2504.99, indicating a bearish trend. The MACD of -43.33 indicates Negative momentum. The RSI at 36.60 is Neutral, neither overbought nor oversold. The STOCH value of 29.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:BWY.

Bellway Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
£2.08B30.012.27%6.04%-66.96%
73
Outperform
£3.58B10.0210.73%6.62%0.90%-4.04%
68
Neutral
£3.62B14.107.44%4.89%16.74%-0.16%
66
Neutral
£3.56B41.981.97%9.44%4.21%-65.57%
62
Neutral
£1.75B9.294.55%3.47%0.65%-43.22%
61
Neutral
£2.93B19.944.22%2.41%-11.63%-31.81%
57
Neutral
£5.36B36.041.81%4.58%4.78%-53.59%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:BWY
Bellway
2,476.00
-563.64
-18.54%
GB:BKG
The Berkeley Group Holdings
3,712.00
-1,445.41
-28.03%
GB:BTRW
Barratt Redrow
379.00
-152.41
-28.68%
GB:TW
Taylor Wimpey
100.70
-53.54
-34.71%
GB:PSN
Persimmon
1,128.50
-507.84
-31.04%
GB:VTY
Vistry Group
646.40
-748.60
-53.66%

Bellway Corporate Events

Executive/Board Changes
Bellway Announces Key Board and Executive Appointments
Neutral
Aug 12, 2025

Bellway p.l.c. has announced the appointment of Gill Barr as an independent Non-Executive Director, effective from 15 September 2025. Barr will join the Audit, Nomination, and Remuneration Committees and will become Chair of the Remuneration Committee in April 2026. Her extensive experience in marketing and management across various industries, including her roles at The Co-operative Group and John Lewis, is expected to bring valuable insights to the board. Additionally, Phil Hope has been appointed as the new Company Secretary, succeeding Simon Scougall. Hope, who has been with Bellway for 15 years, brings significant corporate governance and listed company experience to his new role.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Bellway Reports Strong Growth in Housing Completions and Revenue for FY25
Positive
Aug 12, 2025

Bellway p.l.c. reported a strong performance for the year ending 31 July 2025, with a 14.3% increase in housing completions and a 17% rise in housing revenue. The company achieved an average selling price of £316,000 and improved its operating margin to nearly 11%. Bellway’s forward order book increased to 5,307 homes, supported by a robust land bank and a disciplined approach to land acquisition. The company is well-positioned for further growth in FY26, with plans to increase volume output to around 9,200 homes. Despite market challenges, Bellway remains confident in its ability to deliver long-term growth and enhanced shareholder returns, supported by recent government planning reforms.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Regulatory Filings and Compliance
Bellway Announces Updated Voting Rights and Share Capital Structure
Neutral
Aug 1, 2025

Bellway p.l.c. has announced that as of July 31, 2025, its issued share capital consists of 118,991,699 ordinary shares with voting rights, excluding shares held by the Bellway Employee Benefit Trust, which has waived its voting rights. This results in a total of 118,621,602 voting rights for the company, potentially impacting shareholder influence and decision-making processes.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Bellway Announces New Director Appointment
Positive
Jul 21, 2025

Bellway PLC has announced a change in the appointments of Sarah Whitney, a non-executive and senior independent director. Sarah Whitney will join Regional REIT Limited as an independent non-executive director starting from August 4, 2025, and will also serve on several key committees. This appointment reflects Bellway’s strategic alignment and the strengthening of its leadership team, potentially impacting its governance and stakeholder relations positively.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Bellway Joins UK Housebuilders in CMA Commitments for Affordable Housing
Neutral
Jul 9, 2025

Bellway p.l.c. has engaged with the UK Competition and Markets Authority (CMA) by offering voluntary commitments, alongside six other UK housebuilders, to address potential concerns in the housebuilding sector. As part of these commitments, Bellway will contribute £13.5 million to government programs supporting affordable housing, without admitting any wrongdoing. The CMA has not determined any competition law infringement, and Bellway is committed to working constructively with the authority.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Regulatory Filings and Compliance
Bellway Updates on Share Capital and Voting Rights
Neutral
Jul 3, 2025

Bellway p.l.c. announced that as of 30 June 2025, its ordinary issued share capital consists of 118,988,622 ordinary shares with voting rights. The Bellway Employee Benefit Trust holds 370,097 of these shares but has waived its voting rights and dividend entitlements, resulting in a total of 118,618,525 voting rights. This update on voting rights and capital structure provides stakeholders with clarity on the company’s share distribution and governance.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Bellway Reports Strong Trading Performance and Growth Outlook
Positive
Jun 10, 2025

Bellway p.l.c. reported robust trading performance from February to June 2025, with increased customer confidence and reservation rates. The company expects to deliver between 8,600 and 8,700 homes for the financial year, with an anticipated operating margin of 11%. The forward order book has grown by 7.7%, and the average selling price is expected to rise to £315,000 due to changes in product mix. Bellway’s disciplined approach to land acquisition has resulted in the purchase of 6,759 plots, supporting its long-term growth ambitions. The company is fully sold for the current financial year and aims for a 20% cumulative volume growth by July 2026, focusing on capital efficiency and shareholder value.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Regulatory Filings and Compliance
Bellway PLC Announces Current Share Capital and Voting Rights
Neutral
Jun 2, 2025

Bellway PLC has announced that its ordinary issued share capital consists of 118,985,070 ordinary shares, each with voting rights, as of May 30, 2025. The Bellway Employee Benefit Trust holds 370,097 of these shares but has waived its rights to vote and receive dividends, resulting in a total of 118,614,973 voting rights. This update reflects the company’s current capital structure and its implications for shareholder voting power.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

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: Aug 12, 2025