9th Nov 2020. 11.40am
Taylor Wimpey (TW.) – Market Alert
Taylor Wimpey expects 2021 profits to beat forecasts
Taylor Wimey’s share price surged 12% higher this morning on the back of a surprisingly bullish trading update.
The UK housebuilder said it expects results for next year to be “materially above the top end” of current expectations.
“The quick recovery of the housing market is testament to the underlying strength of demand and supportive lending backdrop” said chief executive Pete Redfern.
“The early signs suggest that customers wish to continue to progress purchases, with forward sales indicators at healthy levels” he added.
Taylor Wimpey currently trade on a forecast price/earnings multiple (PE Ratio) of 11.1 – top quartile in the Homebuilding & Construction Supplies sector.
The PE ration looks even more attractive when compared to the firms forward earnings growth rate of 42.7%.
Today’s positive price gap has created a burst of bullish momentum.
A price gap of this nature is likely to do two things:
The bottom of the gap should provide a key area of short-term support
The gap should provide a burst of bullish momentum which is likely to propel prices towards 168p resistance.
This research is prepared for general information only and should not be construed as any form of investment advice.