On Tuesday, Citi revised its price target for Vistry Group PLC (VTY:LN) to GBP8.43 from the previous GBP10.23, while keeping a Neutral rating on the stock. The adjustment follows Vistry Group's trading update, which provided insights into previously flagged build cost issues in the company's South Division.
An independent review found no systemic issues beyond the South Division, leading to a process and control enhancement and an additional provision of approximately GBP50 million.
The trading update also highlighted potential growth concerns for Vistry Group, indicating a slowdown in partner activity in anticipation of the budget and competitive pricing from private rental sector (PRS) investors.
Consequently, the company's forecast for fiscal year 2024 (FY24) predicts a profit before tax (PBT) of around GBP300 million, with a lower production volume of approximately 17,500 units and a slower growth trajectory for FY25 and beyond.
The recent decline in Vistry Group's stock value is attributed to a combination of the South Division's cost issues and apprehensions regarding a demand downturn.
Investors are expected to look for signs of order book growth to gain confidence in the company's current growth model. The updated guidance and provisions made by Vistry Group are intended to address these concerns and stabilize investor sentiment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.